Comparative financial statement data for Donovan Company and Maltese Company,two competitors in the same industry,appear below.All balance sheet data are as of December 31,2012,and December 31,2011.
REQUIRED:
(a)Prepare a common-size 2012 income statement using the data for Donovan Company and Maltese Company in columnar form.
(b)Comment on the relative profitability of the companies by computing the return on assets (Net income/(Average total assets)and the return on total equity (Net income / (Average Shareholders' Equity)ratios for both companies.
Definitions:
Social Facilitation Theory
The idea that the presence of others affects an individual's performance, often enhancing the performance on simple tasks and impairing it on complex tasks.
Dominant Response
The most likely action or behavior to be displayed by an individual in a given situation, often resulting from practice, habit, or genetic predisposition.
Evaluation Apprehension
Anxiety or fear regarding being judged or evaluated by others.
Human Cultural Group
A human cultural group refers to people sharing common cultural characteristics, practices, beliefs, and values, distinguishing them from other groups.
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