The financial statements for 2017 and 2018 for Crosby Co. are shown in this popup window, and those for Prairie Inc. are shown in this popup window, a. How did Crosby Co.'s profit margins change from 2017 to 2018? To what would you attribute the differences? Answer the same question for Prairie Inc. b. Compare the profit margins between Crosby Co. and Prairie Inc. How are they different? How would you explain these differences? c. What differences do you notice in the common-sized balance sheets that might indicate that one of the firms is doing better than the other? a. How did Crosby Co.'s gross profit margin change from 2017 to 2018? % (Round to one decimal place.) Enter your answer in the answer box and then click Check Answer. 8 parts Clear All remaining 11.8% $ $ 8,039 749 1,011 1.1% 7,322 66 995 10.8% 0.1% 1.5% 1.5% 14.4% 12.3% 28.1% 29.6% $ 9,799 19,122 2,127 7,244 $ 8,383 20,099 2.642 6.966 3.9% 3.1% 10.6% 10.2% $ 38,292 56.2% $ 38,090 56.0% IU IML MOOCIO LIABILITIES Accounts payable and accruals Short-term notes payable Other current liabilities Total current liabilities Long-term debt Deferred taxes Other liabilities TOTAL LIABILITIES EQUITY Common equity: Common stock: Par value Capital surplus Total common stock sold Less: Treasury stock-total dollar amount Total common stock Retained earnings Total common equity TOTAL LIABILITIES AND STOCKHOLDERS EQUITY 0.0% 225.6% 225.6% $ 17 154,577 $ 154,594 (35,077) $ 119,517 89,721 $ 29,796 0.0% 227.0% 227.0% -51.5% 175.5% 131.8% $ 17 153,410 $ 153,427 (37,630) $ 115,797 85,893 $ 29,904 -55.3% 170.3% 126.3% 43.8% 44.0% $ 68,088 100.0% $ 67,994 100.0% Prairie Inc. Annual Income Statement and Common-Sized Income Statement for Years Ending January 31, 2017 and January 31, 2018 (in $ millions except earnings per share) 2017 2018 Percentage of Percentage of Dollars Sales Dollar value Sales Sales $ 42,278 100.0% $ 45,041 100.0% 33,415 79.0% 35,591 Cost of goods sold 79.0% Gross profits $ 8,863 21.0% $ 9,450 21.0% (139) 0.3% 283 Selling, general, and administrative expenses 0.6% Operating income $ 8,724 20.6% $ 9,167 20.4% Interest expense 369 0.9% 235 0.5% 905 2.1% 688 1.5% Nonoperating income (expenses) Earnings before tax $ 9,260 21.9% $ 9,620 21.4% 3,087 Income taxes 7.3% 2,984 6.6% Net income (loss) $ 6,173 14.6% 14.7% $ 6,636 Common shares outstanding Earnings per share 1.800.0 $ 3.43 1,800.0 $ 3.69 January 31, 2018 Percentage of Dollars Assets $ 3,931 4.8% 6,967 8.6% 1,487 1.8% 1,724 2.1% $ 14,109 17.4% 50.7% -27.6% $ 41,192 (22,459) $ 18,733 48,399 23.1% 59.6% $ 81,241 100.0% 6.0% Prairie Inc. Balance Sheet and Common-Sized Balance Sheet for Years Ending January 31, 2017 and January 31, 2018 (5 millions) January 31, 2017 Percentage of ASSETS Dollars Assets Cash and cash equivalents $ 3,387 4.5% Receivables 6,540 8.7% Inventories 1.537 2.1% 2.245 3.0% Other current assets 18.3% $ 13,709 Total current assets Gross fixed assets $ 38,582 51.5% Accumulated depreciation and amortization (20,687) -27.6% Net fixed assets $ 17,895 23.9% 43,294 57.8% Other assets TOTAL ASSETS $ 74,898 100.0% LIABILITIES Accounts payable and accruals $ 4,619 6.2% Short-term notes payable 3,614 4.8% Other current liabilities 4,580 6.1% Total current liabilities $ 12,813 17.1% Long-term debt 10,981 14.7% Deferred taxes 2.251 3.0% Other liabilities 9,094 12.1% TOTAL LIABILITIES $ 35,139 46.9% EQUITY Common equity: Total common stock sold $ 31,731 42.4% Less: Treasury stock-total dollar amount (31,671) -42.3% Total common stock $ 60 0.1% Retained earnings 42,965 57.4% Other equity (3,266) Total common equity $ 39,759 53.1% TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 74,898 100.0% 1.9% 6.5% 14.4% $ 4,899 1,512 5,293 $ 11,704 13,050 4,050 7,008 S 35,812 16.1% 5.0% 8.6% 44.1% 41.2% 42.6% -1.4% $ 33,440 (34,582) (1,142) 47,758 (1,187) $ 45,429 58.8% -1.5% 55.9% $ 81,241 100.0% The financial statements for 2017 and 2018 for Crosby Co. are shown in this popup window, and those for Prairie Inc. are shown in this popup window, a. How did Crosby Co.'s profit margins change from 2017 to 2018? To what would you attribute the differences? Answer the same question for Prairie Inc. b. Compare the profit margins between Crosby Co. and Prairie Inc. How are they different? How would you explain these differences? c. What differences do you notice in the common-sized balance sheets that might indicate that one of the firms is doing better than the other? a. How did Crosby Co.'s gross profit margin change from 2017 to 2018? % (Round to one decimal place.) Enter your answer in the answer box and then click Check Answer. 8 parts Clear All remaining 11.8% $ $ 8,039 749 1,011 1.1% 7,322 66 995 10.8% 0.1% 1.5% 1.5% 14.4% 12.3% 28.1% 29.6% $ 9,799 19,122 2,127 7,244 $ 8,383 20,099 2.642 6.966 3.9% 3.1% 10.6% 10.2% $ 38,292 56.2% $ 38,090 56.0% IU IML MOOCIO LIABILITIES Accounts payable and accruals Short-term notes payable Other current liabilities Total current liabilities Long-term debt Deferred taxes Other liabilities TOTAL LIABILITIES EQUITY Common equity: Common stock: Par value Capital surplus Total common stock sold Less: Treasury stock-total dollar amount Total common stock Retained earnings Total common equity TOTAL LIABILITIES AND STOCKHOLDERS EQUITY 0.0% 225.6% 225.6% $ 17 154,577 $ 154,594 (35,077) $ 119,517 89,721 $ 29,796 0.0% 227.0% 227.0% -51.5% 175.5% 131.8% $ 17 153,410 $ 153,427 (37,630) $ 115,797 85,893 $ 29,904 -55.3% 170.3% 126.3% 43.8% 44.0% $ 68,088 100.0% $ 67,994 100.0% Prairie Inc. Annual Income Statement and Common-Sized Income Statement for Years Ending January 31, 2017 and January 31, 2018 (in $ millions except earnings per share) 2017 2018 Percentage of Percentage of Dollars Sales Dollar value Sales Sales $ 42,278 100.0% $ 45,041 100.0% 33,415 79.0% 35,591 Cost of goods sold 79.0% Gross profits $ 8,863 21.0% $ 9,450 21.0% (139) 0.3% 283 Selling, general, and administrative expenses 0.6% Operating income $ 8,724 20.6% $ 9,167 20.4% Interest expense 369 0.9% 235 0.5% 905 2.1% 688 1.5% Nonoperating income (expenses) Earnings before tax $ 9,260 21.9% $ 9,620 21.4% 3,087 Income taxes 7.3% 2,984 6.6% Net income (loss) $ 6,173 14.6% 14.7% $ 6,636 Common shares outstanding Earnings per share 1.800.0 $ 3.43 1,800.0 $ 3.69 January 31, 2018 Percentage of Dollars Assets $ 3,931 4.8% 6,967 8.6% 1,487 1.8% 1,724 2.1% $ 14,109 17.4% 50.7% -27.6% $ 41,192 (22,459) $ 18,733 48,399 23.1% 59.6% $ 81,241 100.0% 6.0% Prairie Inc. Balance Sheet and Common-Sized Balance Sheet for Years Ending January 31, 2017 and January 31, 2018 (5 millions) January 31, 2017 Percentage of ASSETS Dollars Assets Cash and cash equivalents $ 3,387 4.5% Receivables 6,540 8.7% Inventories 1.537 2.1% 2.245 3.0% Other current assets 18.3% $ 13,709 Total current assets Gross fixed assets $ 38,582 51.5% Accumulated depreciation and amortization (20,687) -27.6% Net fixed assets $ 17,895 23.9% 43,294 57.8% Other assets TOTAL ASSETS $ 74,898 100.0% LIABILITIES Accounts payable and accruals $ 4,619 6.2% Short-term notes payable 3,614 4.8% Other current liabilities 4,580 6.1% Total current liabilities $ 12,813 17.1% Long-term debt 10,981 14.7% Deferred taxes 2.251 3.0% Other liabilities 9,094 12.1% TOTAL LIABILITIES $ 35,139 46.9% EQUITY Common equity: Total common stock sold $ 31,731 42.4% Less: Treasury stock-total dollar amount (31,671) -42.3% Total common stock $ 60 0.1% Retained earnings 42,965 57.4% Other equity (3,266) Total common equity $ 39,759 53.1% TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 74,898 100.0% 1.9% 6.5% 14.4% $ 4,899 1,512 5,293 $ 11,704 13,050 4,050 7,008 S 35,812 16.1% 5.0% 8.6% 44.1% 41.2% 42.6% -1.4% $ 33,440 (34,582) (1,142) 47,758 (1,187) $ 45,429 58.8% -1.5% 55.9% $ 81,241 100.0%