Exam 9: Metric Analysis of Financial Statements

The balance sheets at the end of each of the first two years of operations indicate the following: 2017 2018 Total current assets \ 600,000 \ 560,000 Total investments 60,000 40,000 Total property, plant, and equipment 900,000 700,000 Total current liabilities 125,000 80,000 Total long-term liabilities 350,000 250,000 Preferred 9\% stock, \ 100 par 100,000 100,000 Common stock, \ 10 par 600,000 600,000 Paid-in capital in excess of par-common stock 60,000 60,000 Retained earnings 325,000 210,000 ? Based on the above information, if net income is $130,000 and interest expense is $40,000 for 2017, what is the return on common stockholders' equity for 2017 (round to one decimal place)?

The percentage analysis of the relationship of each component in a financial statement to a total within the statement is referred as vertical analysis.