the samuels company presents the following condensed income statement and balance sh 563115

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,

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?

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