You have just been hired as a financial analyst for Purple Power Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the companys financial statements, including comparing Purple Powers performance to its major competitors. The companys financial statements for the last two years are as follows:

Purple Power Company Comparative Balance Sheet
	This Year	Last Year
Assets
Current Assets:
Cash	$960,000	$1,260,000
Marketable Securities	$0	$300,000
Accounts Receivable, Net	$2,700,000	$1,800,000
Inventory	$3,900,000	$2,400,000
Prepaid Expenses	$240,000	$180,000
Total Current Assets	$7,800,000	$5,940,000
Plant and Equipment, Net	$9,300,000	$8,940,000
Total Assets	$17,100,000	$14,880,000
Liabilities and Stockholders' Equity
Liabilities:
Current Liabilities	$3,900,000	$2,760,000
Note Payable, 10%	$3,600,000	$3,000,000
Total Liabilities	$7,500,000	$5,760,000
Stockholders' Equity:
Common Stock, $78 Par Value	$7,800,000	$7,800,000
Retained Earnings	$1,800,000	$1,320,000
Total Stockholders' Equity	$9,600,000	$9,120,000
Total Liabilities and Stockholders' Equity	$17,100,000	$14,880,000

Purple Power Company Comparative Income Statement and Reconciliation
	This Year	Last Year
Sales (All on Account)	$15,750,000	$12,480,000
Cost of Goods Sold	$12,600,000	$9,900,000
Gross Margin	$3,150,000	$2,580,000
Selling and Administrative Expenses	$1,590,000	$1,560,000
Net Operating Income	$1,560,000	$1,020,000
Interest Expense	$360,000	$300,000
Net Income Before Taxes	$1,200,000	$720,000
Income Taxes (30%)	$360,000	$216,000
Net Income	$840,000	$504,000
Common Dividends	$360,000	$252,000
Net Income Retained	$480,000	$252,000
Beginning Retained Earnings	$1,320,000	$1,068,000
Ending Retained Earnings	$1,800,000	$1,320,000

You gather the following financial data and ratios that are typical of companies in Purple Power Companys industry:

Current Ratio	2.3
Acid-Test Ratio	1.2
Average Collection Period	30 days
Average Sale Period	60 days
Return on Assets	9.5%
Debt-to-Equity Ratio	0.65
Times Interest Earned Ratio	5.7
Price-Earnings Ratio	10

Present the balance sheet in common-size format and present the income statement in common-size format down through net income.