Question

(a) Prepare a vertical analysis of the 2017 income statement data for Lionel Company and Barrymore Company in columnar form

(b) comment on the relative profitabiliyy of the companies by computing the return on assets and the return on ordinary shareholder's equity for both companies

P14-1 Comparative statement data for Lionel Company and Barrymore Company, two competitors, appear below. All statement of financial position data are as of December 31, 2017, and December 31, 2016. Net sales Cost of goods sold Operating expenses Interest expense Income tax expense Plant assets (net) Current assets Share capital-ordinary, 5 par Retained earnings Non-current liabilities Current liabilities Lionel Company 2017 2016 1,549,035 1,053,345 263,336 7,745 61,960 596,920 575,610 401,584 388,020 578,765 578,765 252,224 225,358 102,500 84,000 65,015 75,507 Barrymore Company 2017 2016 339,038 237,325 77,979 2,034 8,476 142,842 128,927 86,450 82,581 137,435 137,435 55,528 47,430 16,711 11,989 19,618 14,654 Instructions (a) Prepare a vertical analysis of the 2017 income statement data for Lionel Company and Barrymore Company in columnar form. (b) - Comment on the relative profitability of the companies by computing the return on assets and the return on ordinary shareholders' equity for both companies