IV. Direction: Perform a vertical and horizontal analysis and interpret the result.The owner of Sunshine Marketing asked your help to analyze and interpret its financial statementusing vertical and horizontal approach. The following comparative statements were provided. Usethe answer sheet format provided below and answer the questions asked.Sunshine MarketingComparative Statement of Financial PositionFor the years 2018 and 201920182019Current AssetsP235,374P361,312899,300236,788Property, Plant & Equipment, net962,508Other Assets188,918P1,386,800Total AssetsP1,497,400Total Current liabilitiesP220,590P258,902Long-term DebtOwner's Capital498,998473,500667,212P1,386,800764,998Total Liabilities & EquityP1,497,400Sunshine MarketingComparative Statement of Financial PositionFor the years 2018 and 201920182019RevenueP1,875,000P2,368,900Cost of Goods soldGross profitSelling& Administrative ExpenseOther Expenses1,098,0001,468,718900,182777,000467,875595,00025,500P279,68225,500Net IncomeP283,625ANSWER SHEET:VerticalApproachHorizontal ApproachPercentage ofIncreasePeso ValueIncreaseStatement of Financial Position20182019(Decrease)(Decrease)Current AssetsProperty, Plant & Equipment, netOther AssetsTotal AssetsTotal Current liabilitiesLong-term DebtOwner's CapitalTotal Liabilities & Equity14 Income StatementRevenueCost of Goods soldGross profitSelling& Administrative ExpenseOther ExpensesNet IncomeQuestions:1. What would be the cause of changes in owner's equity?2. How come that the net income was decreased in peso amount while its sales increases? Whatare the possible factors that affect the choanges in the net income?

As per the Answer Sheet given, the Solution is provided in the same format: Statement of…

Answered: Sunshine Marketing Comparative…

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter17: Financial Statement Analysis

Section: Chapter Questions

Problem 1MP

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Read each definition below and write the number of the definition in the blank beside the appropriate term. The quiz solutions appear at the end of the chapter. Understandability Relevance Faithful representation Comparability Depreciation Consistency Materiality Conservatism Operating cycle Current asset Current liability Liquidity Working capital Current ratio Single-step income statement Multiple-step income statement Gross profit Profit margin Auditors report An income statement in which all expenses are added together and subtracted from all revenues. The magnitude of an accounting information omission or misstatement that will affect the judgment of someone relying on the information. The capacity of information to make a difference in a decision. An income statement that shows classifications of revenues and expenses as well as important subtotals. The practice of using the least optimistic estimate when two estimates of amounts are about equally likely. The quality of accounting information that makes it comprehensible to those willing to spend the necessary time. Current assets divided by current liabilities. The quality of information that makes it complete, neutral, and free from error. An obligation that will be satisfied within the next operating cycle or within one year if the cycle is shorter than one year. Current assets minus current liabilities. Net income divided by sales. For accounting information, the quality that allows a user to analyze two or more companies and look for similarities and differences. An asset that is expected to be realized in cash or sold or consumed during the operating cycle or within one year if the cycle is shorter than one year. The ability of a company to pay its debts as they come due. For accounting information, the quality that allows a user to compare two or more accounting periods for a single company. The process of allocating the cost of a long-term tangible asset over its useful life. The period of time between the purchase of inventory and the collection of any receivable from the sale of the inventory. Sales less cost of goods sold. The opinion rendered by a public accounting firm concerning the fairness of the presentation of the financial statements.
Which of the following terms is used when assuming a business will continue to operate in the foreseeable future? A. separate entity concept B. monetary measurement concept C. going concern assumption D. time period assumption
The metrics based on financial numbers produced by the accounting system are ________. A. quantitative factors B. qualitative factors C. stakeholders D. stockholders
see attached 1-3 and 1-5 to answer this Refer to the financial statements of Mixon Company in Exercises 1–3 and 1–5. Evaluate the effi- ciency and profitability of the company by computing the following: (a) net profit margin, (b) total asset turnover, and (c) return on total assets. Comment on these ratio results.
What does the below financial statement tell you about Nealon, Inc? This analysis uses accounting reports for an understanding of a company’s current economic condition and project into the future. A financial analysis allows management and owners to plan, correct and proceed properly for the best success. Review and analyze the following Financial Statement using horizontal analysis and ratios. Please be as descriptive as possible.
Complete all of the following listed in the picture. Such as: General Journal General Ledaer Trial Balance Income Statement Statement of SE Balance Sheet Analysis Following an accountant format. Including: Compute the total asset turnover ratio for 2020.... Compute the net profit margin ratio for 2020...
See Image for Information Compute the following performance indices for both companies: Profit margin Asset turnover Return on Capital Employed (ROCE) Current ratio Debt equity ratio Compare and analyse the performance of the two companies computed in (1) above and explain what the board of Box Limited needs to do to achieve their objective . c. Which other non-financial measures can influence the decision of the board of Box Limited?
Requirement: Prepare a Horizontal and Vertical Analysis for the Statement of Financial Position and Statement of Comprehensive Income. Write it on any piece of paper in good form (report form). Please write your name at the top of each piece of paper.
The following are the typical classifications used in a statement of financial position : a. Current assets b. Investments and funds c. Property, plant, and equipment d. Investment property e. Intangible assets f. Current liabilities g. Long-term liabilities h. Issued capital i. Retained earnings Required : For each of the following statements of financial position items. use the letters above to indicate the appropriate classification category. If the item is a contra account, place a minus before the chosen letter 3. ………. Unearned rent revenue 4. ……….. Income less dividends, accumulated 5. ………. Building, in use
Below are the two basic financial statements of Chiz Trading Company. You are tasked to prepare an analysis using Horizontal and Vertical Analysis of their two-dated financial statements. In addition to this you have been tasked to prepare financial ratios measuring the company’s: Liquidity Status Current Ratios Quick Asset Ratios Efficiency Status Asset Turnover Fixed Asset Turnover Inventory Turnover Days in Inventory Accounts Receivable Turnover Days in Receivable Profitability Status: Gross Profit margin Ratio Operating Income Ratio Net Profit Ratio Return on Assets Return on Equity
Statements of Financial Accounting Concepts set forth financial accounting and reporting objectives and fundamentals that will be used by the Financial Accounting Standards Board in developing stands. Concepts Statement No. 6 defines various elements of financial statements. Instructions: Answer the following questions based on SFAC No. 6: (a-c have already been answered in previous question) d. Define "distributions to owners" and provide examples of this type of transaction. What financial statement element other than equity is typically affected by distributions? e. What are examples of changes within owners' equity that do not change the total amount of owners' equity?
OBIECTIVES: I. Identify the elements of the SCI and describe each of these items for service business and merchandising business II. TOPIC: STATEMENT OF COMPREHENSIVE INCOME III. Direction: A. Write the correct word or words to complete the statement. 1. An example for this is gain or losse on hedging derivatives. 2.An approach used on preparing statement of comprehensive income that shows expense by its nature. 3.An increases in economic benefits during the period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity. 4.This occurs when revenue is less than expenses. 5.lt arises in the course of the ordinary activities of a business and is referred to by a variety of different names including sales, fee, interest, and etc. 6. The difference between an Income Statement and SCI ... 7. The nature of business for a single step statement of comprehensive income 8. The nature of business for a multi-step…

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