At the end of 2006, the following information is available for Kinlaw and Parker companies:

Required:

a. Prepare common size income statements for each company.

b. Compute the return on assets and return on equity for each company.

c. Which company is more profitable from the stockholders’ perspective?

d. One company is a high-end retailer, and the other operates a discount store. Which is the dis¬ counter? Support your selection by referring to appropriate ratios.

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Kinlaw Parker Sales $2,000 $2,000,000 Cost of Goods Sold 1,400 1,200,000 Selling and Administrative Expenses 520 640,000 Total Assets 2,500 2,500,000 Stockholders' Equity 750 730,000