Vertical Analysis Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. Formula: Vertical analysis percentage = ( Specific item Base amount ) × 100 This analysis is otherwise called as common-size statement. To prepare: Comparative income statement for the two-year period. Given info: Income statement for the two year period.

Question

Want to see the full answer?

Answer 1

Question

Chapter 17, Problem 17.2BPR

1.

To determine

Vertical Analysis

Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount.

Formula:

Vertical analysis percentage =(Specific itemBase amount)×100

This analysis is otherwise called as common-size statement.

To prepare: Comparative income statement for the two-year period.

Given info: Income statement for the two year period.

2.

To determine

To comment: Significant relationships revealed by the horizontal analysis.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Vertical analysis of income statement For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $50,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement: REFER IMAGE Instructions1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. (Round percentages to one decimal place.)2. To the extent the data permit, comment on the significant relationships revealed by the vertical analysis prepared in (1).

Vertical Analysis of Income Statement For 20Y2, Fielder Industries Inc. initiated a sales promotion campaign that included the expenditure of an additional $40,000 for advertising. At the end of the year, Leif Grando, the president, is presented with the following condensed comparative income statement: Fielder Industries Inc.Comparative Income StatementFor the Years Ended December 31, 20Y2 and 20Y1 20Y2 20Y1 Sales $1,300,000 $1,180,000 Cost of goods sold (682,500) (613,600) Gross profit $617,500 $566,400 Selling expenses $(260,000) $(188,800) Administrative expenses (169,000) (177,000) Total operating expenses $(429,000) $(365,800) Operating income $188,500 $200,600 Other revenue 78,000 70,800 Income before income tax expense $266,500 $271,400 Income tax expense (117,000) (106,200) Net income $149,500 $165,200 Required: Question Content Area 1. Prepare a comparative income statement for the two-year period,…

Access the February 21, 2017, filing of the December 31, 2016, 10-K report of The Hershey Company (ticker: HSY) at SEC.gov and complete the following requirements. Required Compute or identify the following profitability ratios of Hershey for its years ending December 31, 2016, and December 31, 2015. Interpret its profitability using the results obtained for these two years. 1. Profit margin ratio (round the percent to one decimal). 2. Gross profit ratio (round the percent to one decimal). 3. Return on total assets (round the percent to one decimal). (Total assets at year-end 2014 were $5,622,870 in thousands.) 4. Return on common stockholders’ equity (round the percent to one decimal). (Total shareholders’ equity at year-end 2014 was $1,519,530 in thousands.) 5. Basic net income per common share (round to the nearest cent).