Question

Problem 13-1A (Part Level Submission) Here are comparative statement data for Wildhorse Company and Sandhill Company, two competitors. All balance sheet data are as of December 31, 2017, and December 31, 2016. Net sales Cost of goods sold Operating expenses Interest expense Income tax expense Wildhorse Company 2017 2016 $1,892,000 1,075,000 260,000 8,200 65,300 Sandhill Company 2017 2016 $580,000 298,000 87,000 2,200 29,000 Current assets Plant assets (net) Current liabilities Long-term liabilities 498,742 806,004 101,477 174,405 $477,987 765,000 115,997 137,700 127,504 213,784 54,082 45,319 $ 121,585 192,492 46,330 38,250 Common stock, $10 par Retained earnings 765,000 263,864 765,000 224,290 183,600 58,287 183,600 45,897

Answer 1

Return On Assets
	Operating Income
		Wild horse company	Sandhill Company
	Net sales	$                      18,92,000	$                       5,80,000
	Less: Cost Of Goods Sold	$                      10,75,000	$                       2,98,000
	Operating Expenses	$                        2,60,000	$                           87,000
	Operating Income	$                        5,57,000	$                       1,95,000
	Less:
	Interest expenses	$                              8,200	$                             2,200
	Income Tax	$                            65,300	$                           29,000
A)	Net Income	$                        4,83,500	$                       1,63,800
	Average Assets
		Wild horse company	Sandhill Company
	Total Asset of 2017	1304746	341288
	Total Asset of 2016	1242987	314077
B)	Average Assets	1273866.5	327682.5
C)	Return On Assets (A/B)	38.0%	50.0%
Return On Common Stockholders Equity
	Net Income Available to common stock
		Wild horse company	Sandhill Company
	Operating Income	$                        5,57,000	$                       1,95,000
	Less:
	Interest expenses	$                              8,200	$                             2,200
	Income Tax	$                            65,300	$                           29,000
A)	Net Income	$                        4,83,500	$                       1,63,800
	(available to common stock
	Average Commonstockholders equity
		Wild horse company	Sandhill Company
	Common stockholders for 2017	$                      10,28,864	$                       2,41,887
	Common stockholders for 2016	$                        9,89,290	$                       2,29,497
B)	Average Common stockholders equity	$                      10,09,077	$                       2,35,692
C)	Return On Common Stockholders Equity	47.9%	69.5%