Financial Analysis ActivityComparative statement data for P Company and Q Company-competitors-appear on the following page.P CompanyQ Company2003200220032002Net sales$100,00030,00015,0001,000S80,000Gross profitOperating expensesAmortization expenseInterest expenseIncome tax expense30,00020,0001,5004001,0005002,0006,000Net income12,600Cash1,0001,00010,00040,00062,60030,00021,00040,00022,6004,000Accounts receivable11,00024,00022,0007,00030,000110,000Other current assets8,00021,0005,00027,0001,00017,000Capital assets (net)20,000Current liabilities92,00010,0004,00028,000Long-term liabilities40,00010,0001,00023,000Common stockRetained earningsInstructions(a) Prepare a vertical analysis of the 2003 income statement data for P and Q.(b) Compute the return on common shareholders' equity for both companies for 2003.(c) Compare receivable collections between the two companies for 2003.(d) Compare the short-term liquidity of the two companies for 2003.

The Statement of Financial Position - The statement of financial position is the position of the…

Financial Analysis Activity Comparative statement data for P Company and Q Company-competitors-appear on the following page. P Company Q Company 2003 2002 2003 2002 Net sales $100,000 30,000 15,000 1,000 400 1,000 S80,000 30,000 20,000 1,500 Gross profit Operating expenses Amortization expense Interest expense Income tax expense 500 2,000 6,000 Net income 12,600 1,000 10,000 40,000 1,000 11,000 30,000 110,000 92,000 10,000 40,000 10,000 Cash 4,000 24,000 8,000 20,000 4,000 28,000 1,000 23,000 Accounts receivable Other current assets 22,000 7,000 Capital assets (net) Current liabilities 62,600 30,000 21,000 40,000 22,600 21,000 5,000 27,000 1,000 17,000 Long-term liabilities Common stock Retained earnings Instructions (a) Prepare a vertical analysis of the 2003 income statement data for P and Q. (b) Compute the return on common shareholders' equity for both companies for 2003. (c) Compare receivable collections between the two companies for 2003. (d) Compare the short-term liquidity of the two companies for 2003.

Financial Analysis Activity Comparative statement data for P Company and Q Company-competitors-appear on the following page. P Company Q Company 2003 2002 2003 2002 Net sales $100,000 30,000 15,000 1,000 400 1,000 S80,000 30,000 20,000 1,500 Gross profit Operating expenses Amortization expense Interest expense Income tax expense 500 2,000 6,000 Net income 12,600 1,000 10,000 40,000 1,000 11,000 30,000 110,000 92,000 10,000 40,000 10,000 Cash 4,000 24,000 8,000 20,000 4,000 28,000 1,000 23,000 Accounts receivable Other current assets 22,000 7,000 Capital assets (net) Current liabilities 62,600 30,000 21,000 40,000 22,600 21,000 5,000 27,000 1,000 17,000 Long-term liabilities Common stock Retained earnings Instructions (a) Prepare a vertical analysis of the 2003 income statement data for P and Q. (b) Compute the return on common shareholders' equity for both companies for 2003. (c) Compare receivable collections between the two companies for 2003. (d) Compare the short-term liquidity of the two companies for 2003.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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