a)
Horizontal Analysis and Vertical Analysis
Horizontal Analysis: Horizontal analysis is prepared to make comparison between the financial statements to determine the changes in the financial statements for the previous year to the current year. The changes of the company are measured in dollars as well as in percentage.
Formula:
Vertical Analysis: Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. Use the following formula to calculate vertical analysis percentage:
Formula:
This analysis is otherwise called as common-size statement.
To prepare: Horizontal analysis of Corporation N’s Comparative Balance Sheets data for 2016 and 2017.
b)
To prepare: Vertical analysis of Corporation N’s comparative condensed balance sheet data for 2017.
Want to see the full answer?
Check out a sample textbook solutionChapter 13 Solutions
FINANCIAL ACCOUNTING>IC<
- Balance sheet data for Brimstone Company follows: a.Determine the working capital and current ratio for 2016 and 2015. b.Does the change in the current ratio from 2015 to 2016 indicate a favorable or an unfavorable trend?arrow_forwardThe following information is taken from the records of Baklava Bakery for the year 2019. A. Calculate net income or net loss for January. B. Calculate net income or net loss for February. C. Calculate net income or net loss for March. D. For each situation, comment on how a stakeholder might view the firms performance. (Hint: Think about the source of the income or loss.)arrow_forwardFinancial statement analysis The financial statements for Nike, Inc., are presented in Appendix D at the end of the text. Use the following additional information (in thousands): Instructions 1. Determine the following measures for the fiscal years ended May 31, 2016, and May 31, 2015. Round ratios and percentages to one decimal place. a. Working capital b. Current ratio c. Quick ratio d. Accounts receivable turnover e. Number of days sales in receivables f. Inventory turnover g. Number of days sales in inventory h. Ratio of liabilities to stockholders equity i. Asset turnover j. Return on total assets. k. Return on common stockholders equity l. Price-earnings ratio, assuming that the market price was 54.90 per share on May 29, 2016, and 52.81 per share on May 30, 2015 m. Percentage relationship of net income to sales 2. What conclusions can be drawn from these analyses?arrow_forward
- The financial statements for Tyler Toys, Inc. are shown in the popup window: LOADING... . Calculate the profit margin, return on assets, and return on equity for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders? Tyler Toys, Inc. Income Statement for Years Ending December 31, 2013 and 2014 2014 2013 Revenue $14,146,094 $13,567,551 Cost of goods sold $-8,448,688 $-8,131,338 Selling, general, and administrative expenses $-998,878 $-980,620 Depreciation $-1,497,580 $-1,472,740 EBIT $3,200,948 $2,982,853 Interest expense $-376,634 $-354,060 Taxes $-1,073,239 $-998,941 Net income $1,751,075 $1,629,852 Right-click on the table and select Copy to Clipboard and then right-click the highlighted texts in the popup dialogue box and select Copy in order to paste its…arrow_forwardThe financial statements for Tyler Toys, Inc. are shown in the popup window: LOADING... . Calculate the profit margin, return on assets, and return on equity for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders? Tyler Toys, Inc. Income Statement for Years Ending December 31, 2013 and 2014 2014 2013 Revenue $14,147,690 $13,566,481 Cost of goods sold $-8,447,054 $-8,131,319 Selling, general, and administrative expenses $-998,405 $-981,658 Depreciation $-1,498,619 $-1,472,478 EBIT $3,203,612 $2,981,026 Interest expense $-376,184 $-355,975 Taxes $-1,074,423 $-997,519 Net income $1,753,005 $1,627,532 Right-click on the table and select Copy to Clipboard and then right-click the highlighted texts in the popup dialogue box and select Copy in order to paste its…arrow_forwardThe financial statements for Tyler Toys, Inc. are shown in the popup window: LOADING... . Calculate the debt ratio, times interest earned ratio, and cash coverage ratio for 2013 and 2014 for Tyler Toys. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or the shareholders? Tyler Toys, Inc. Income Statement for Years Ending December 31, 2013 and 2014 2014 2013 Revenue $14,146,575 $13,566,748 Cost of goods sold $-8,448,000 $-8,132,335 Selling, general, andadministrative expenses $-998,406 $-980,458 Depreciation $-1,497,529 $-1,471,013 EBIT $3,202,640 $2,982,942 Interest expense $-376,217 $-354,594 Taxes $-1,074,041 $-998,772 Net income $1,752,382 $1,629,576 Right-click on the table and select Copy to Clipboard and then right-click the highlighted texts in the popup dialogue box and select Copy in order to paste its…arrow_forward
- Using the Balance Sheets and Income Statement below, please calculate the following ratios for Smolira Golf Corp. (use year-end figures rather than average values where appropriate): Profitability ratios: Profit Margin Return on Assets Return on Equity We will follow up and discuss your calculations during this week's live session. SMOLIRA GOLD CORP.2014 and 2015 Balance Sheets Assets ($) Liabilities and Owners' Equity ($) 2014 2015 2014 2015 Current Assets Current Liabilities Cash 26,450 29,106 Accounts Payable 30,602 35,485 Accounts Receivable 13,693 18,282 Notes Payable 15,840 13,500 Inventory 27,931 32,586 Other 15,280 20,441 Total 68,074 79,974 Total 61,722 69,426 Long-term debt 95,000 110,000 Fixed Assets Owner's equity Net Plant and Equipment 357,165 398,346 Common stock and paid-in surplus 45,000 45,000…arrow_forwardThe following table illustrates the balance sheets for ABC Corporation. Please show how you complete each step in Excel and please show the formulas THE TABLE IS ATTACHED AS AN IMAGE Answering the following questions. What is the total current assets in 2015 for ABC Corporation? What is the total assets in 2015 for ABC Corporation? What is the total current liabilities in 2015 for ABC Corporation? What is the total liabilities in 2015 for ABC Corporation? What is the net working capital in 2015 for ABC Corporation? What is the equity in 2015 for ABC Corporation?arrow_forwardThe attached table illustrates the balance sheets for ABC Corporation. Answering the following questions. What is the total current assets in 2015 for ABC Corporation? What is the total assets in 2015 for ABC Corporation? What is the total current liabilities in 2015 for ABC Corporation? What is the total liabilities in 2015 for ABC Corporation? What is the net working capital in 2015 for ABC Corporation? What is the equity in 2015 for ABC Corporation?arrow_forward
- The following information is taken from the records of Baklava Bakery for the year 2019 A. Calculate net income or net loss for January.B. Calculate net income or net loss for February.C. Calculate net income or net loss for March.D. For each situation, comment on how a stakeholder might view the firm’s performance. (Hint: Thinkabout the source of the income or loss.)arrow_forwardYou are provided with the Income Statement and the Balance Sheet of HTS software, Inc. for 2011.Required: (a) Calculate the ratios stated in the table below for HTS Software, Inc. for 2011 (b) Analyze the current financial position for the company from a time series and cross section viewpoint. (c) Break your analysis into an evaluation of the firm’s liquidity, activity, debt, profitability and market ratios.arrow_forwardAnalyze the financial statements of the company to you in terms of:1. Solvency Ratio: *Equity Ratio 2. Asset Management Ratio: *Invetory Turnover Ratio *Fixed Asset Turnover Ratio *Total Asset Turnover Ratio 3. Debt Management Ratio: *Time Interest Earned Ratio 4. Profitability Ratio: *Operating Margin *Return on Total Assets *Return on Common Equity.…arrow_forward
- Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
- Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College