Vertical analysis Two income statements for Cornea Company follow: Cornea Company Income Statements For the Years Ended December 31 20Y9 20Y8 Fees earned $1,570,000 $1,300,000 Expenses (832,100) (780,000) Net income $737,900 $520,000 Required: a. Prepare a vertical analysis of Cornea Company’s income statements. If required, round your percentage to the nearest whole number. Cornea Company Income Statements For the Years Ended December 31 20Y9 20Y8 Amount Percent Amount Percent Fees earned $1,570,000 % $1,300,000 % Expenses (832,100) % (780,000) % Operating income $737,900 % $520,000 % b. Does the vertical analysis indicate a favorable or an unfavorable trend?
Vertical analysis Two income statements for Cornea Company follow: Cornea Company Income Statements For the Years Ended December 31 20Y9 20Y8 Fees earned $1,570,000 $1,300,000 Expenses (832,100) (780,000) Net income $737,900 $520,000 Required: a. Prepare a vertical analysis of Cornea Company’s income statements. If required, round your percentage to the nearest whole number. Cornea Company Income Statements For the Years Ended December 31 20Y9 20Y8 Amount Percent Amount Percent Fees earned $1,570,000 % $1,300,000 % Expenses (832,100) % (780,000) % Operating income $737,900 % $520,000 % b. Does the vertical analysis indicate a favorable or an unfavorable trend?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 2PA
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Question
Vertical analysis
Two income statements for Cornea Company follow:
| Cornea Company | |||||
| Income Statements | |||||
| For the Years Ended December 31 | |||||
| 20Y9 | 20Y8 | ||||
| Fees earned | $1,570,000 | $1,300,000 | |||
| Expenses | (832,100) | (780,000) | |||
| Net income | $737,900 | $520,000 |
Required:
a. Prepare a vertical analysis of Cornea Company’s income statements. If required, round your percentage to the nearest whole number.
| Cornea Company | ||||||||
| Income Statements | ||||||||
| For the Years Ended December 31 | ||||||||
| 20Y9 | 20Y8 | |||||||
| Amount | Percent | Amount | Percent | |||||
| Fees earned | $1,570,000 | % | $1,300,000 | % | ||||
| Expenses | (832,100) | % | (780,000) | % | ||||
| Operating income | $737,900 | % | $520,000 | % |
b. Does the vertical analysis indicate a favorable or an unfavorable trend?
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