Vertical Analyses The Samuels Company presents the following condensed income statement and balance sheet information for 2007 and 2008.
Income Statements
|
For Years Ended December 31, |
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|
2008 |
2007 |
|
|
Sales (net) |
$100,000 |
$90,000 |
|
Cost of goods sold |
60,000 |
51,000 |
|
Gross profit |
$40,000 |
$39,000 |
|
Operating expenses |
21,300 |
21,900 |
|
Interest revenue |
1,500 |
1,400 |
|
Interest expense |
3,700 |
2,500 |
|
Income before income taxes |
$16,500 |
$16,000 |
|
Income tax expense |
5,000 |
4,700 |
|
Net income |
$11,500 |
$11,300 |
|
Earnings per share |
$1.92 |
$1.95 |
|
December 31, |
||
|
2008 |
2007 |
|
|
Cash |
$3,000 |
$2,000 |
|
Receivables (net) |
7,000 |
8,000 |
|
Inventories |
11,000 |
12,000 |
|
Long term investments (bonds) |
20,000 |
15,000 |
|
Property and equipment (net) |
79,000 |
63,000 |
|
Total Assets |
$120,000 |
$100,000 |
|
2008 |
2007 |
|
|
Current liabilities |
$10,000 |
$11,400 |
|
Bonds payable, 10% |
37,000 |
25,000 |
|
Common stock, $2 par |
12,000 |
11,600 |
|
Premium on common stock |
21,000 |
19,500 |
|
Retained earnings |
40,000 |
32,500 |
|
Total Liabilities and Stockholders’ Equity |
$120,000 |
$100,000 |
Required
Based on the preceding information for Samuels Company, prepare vertical analyses of the income statements and balance sheets for 2008 and 2007. Do your analyses reveal any trends in the company’s operations and financial position?