Segment Analysis Business can be classified by regions, products or services, types of customers and more; each classification is treated as one segment of the business. Revenues earn from different segments individually, are called segment revenue. Segment revenues are determined from the invoiced data entered in the accounting system. Segment analysis is done to analyze the contribution of different segments to the total operating performance of the company. It is done with the help of horizontal and vertical comparisons. Horizontal Analysis This analysis is done to show the trend of various components in financial statements over a period of time. The earliest period is used as the base period and components of financial statements of later periods are compared with the components of the base period. Vertical analysis Vertical analysis is the method of financial statement analysis, and it is useful to evaluating a company’s performance and financial condition. Vertical analysis is helpful for analyzing the changes in the financial statements over the time, and comparing the each item on a financial statement with a total amount from the same statement. To prepare: Horizontal analysis of the revenue of M Corporation from different brand of restaurants

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Answer 1

Question

Chapter 5, Problem 5.27EX

(a)

To determine

Segment Analysis

Business can be classified by regions, products or services, types of customers and more; each classification is treated as one segment of the business. Revenues earn from different segments individually, are called segment revenue. Segment revenues are determined from the invoiced data entered in the accounting system. Segment analysis is done to analyze the contribution of different segments to the total operating performance of the company. It is done with the help of horizontal and vertical comparisons.

Horizontal Analysis

This analysis is done to show the trend of various components in financial statements over a period of time. The earliest period is used as the base period and components of financial statements of later periods are compared with the components of the base period.

Vertical analysis

Vertical analysis is the method of financial statement analysis, and it is useful to evaluating a company’s performance and financial condition. Vertical analysis is helpful for analyzing the changes in the financial statements over the time, and comparing the each item on a financial statement with a total amount from the same statement.

To prepare: Horizontal analysis of the revenue of M Corporation from different brand of restaurants

(b)

To determine

To prepare: Vertical analysis of the revenue earned from different brand restaurants.

(c)

To determine

To draw: The conclusion from the analysis.

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Payton Company has the following segment revenues for the two most recent fiscal years. Segment Current Year (in millions) Prior Year (in millions) China $790 $640 Canada 330 242 Other countries 213 167 Total revenues $1,333 $1,049 Prepare a vertical analysis of the segment data. Calculate the percentage to four decimal places, then round your answer to one decimal place. For percentages, do not enter the percent sign. Payton Company Vertical Analysis Segment Current Year Amount (in millions) Current Year Percent Prior Year Amount (in millions) Prior Year Percent China $790 % $640 % Canada 330 242 Other countries 213 167 Total revenues $1333 % $1049 %

Vertical analysis income statement Revenue expense data for Innovation quarter Inc for two recent years as follows. Sales Cost of goods. Selling expenses Administrative expenses Income tax expense Current year. 4,000,000 2,280,000 600,000 520,000 240,000 Previous year 3,600,000 1,872,000 648,000 360,000 216,000 A. Prepare an income statement in comparative form, stating to each item for both of years as a percent of sales. Round to the nearest whole percentage. Innovation quarter Inc comparative income tax for the years ended December 31st Sales Cost of goods Selling expenses Administrative expenses Income tax expense $ % $ % $ % $ % $ % $ % $ % $ % B. The vertical analysis indicates that the cost of the goods sold as a percent of sales by 5 percentage points, while selling expenses by 3% percentage and administrative expenses by 3% percentage points. Thus net income as…

Trend Percentages Rotorua Products, Ltd., of New Zealand markets agricultural products for the burgeoning Asian consumer market. The company’s current assets, current liabilities, and sales over the last five years (Year 5 is the most recent year) are as follows: Required: 1. Express all of the asset, liability, and sales data in trend percentages. (Show percentages for each item.) Use Year 1 as the base year and carry computations to one decimal place. 2. Comment on the results of your analysis.

Answer 2

Question

Chapter 5, Problem 5.27EX

(a)

To determine

Segment Analysis

Business can be classified by regions, products or services, types of customers and more; each classification is treated as one segment of the business. Revenues earn from different segments individually, are called segment revenue. Segment revenues are determined from the invoiced data entered in the accounting system. Segment analysis is done to analyze the contribution of different segments to the total operating performance of the company. It is done with the help of horizontal and vertical comparisons.

Horizontal Analysis

This analysis is done to show the trend of various components in financial statements over a period of time. The earliest period is used as the base period and components of financial statements of later periods are compared with the components of the base period.

Vertical analysis

Vertical analysis is the method of financial statement analysis, and it is useful to evaluating a company’s performance and financial condition. Vertical analysis is helpful for analyzing the changes in the financial statements over the time, and comparing the each item on a financial statement with a total amount from the same statement.

To prepare: Horizontal analysis of the revenue of M Corporation from different brand of restaurants

(b)

To determine

To prepare: Vertical analysis of the revenue earned from different brand restaurants.

(c)

To determine

To draw: The conclusion from the analysis.

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Answer 3

Question

Chapter 5, Problem 5.27EX

(a)

To determine

Segment Analysis

Business can be classified by regions, products or services, types of customers and more; each classification is treated as one segment of the business. Revenues earn from different segments individually, are called segment revenue. Segment revenues are determined from the invoiced data entered in the accounting system. Segment analysis is done to analyze the contribution of different segments to the total operating performance of the company. It is done with the help of horizontal and vertical comparisons.

Horizontal Analysis

This analysis is done to show the trend of various components in financial statements over a period of time. The earliest period is used as the base period and components of financial statements of later periods are compared with the components of the base period.

Vertical analysis

Vertical analysis is the method of financial statement analysis, and it is useful to evaluating a company’s performance and financial condition. Vertical analysis is helpful for analyzing the changes in the financial statements over the time, and comparing the each item on a financial statement with a total amount from the same statement.

To prepare: Horizontal analysis of the revenue of M Corporation from different brand of restaurants

(b)

To determine

To prepare: Vertical analysis of the revenue earned from different brand restaurants.

(c)

To determine

To draw: The conclusion from the analysis.

Expert Solution & Answer

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Answer 4

Question

Chapter 5, Problem 5.27EX

(a)

To determine

Segment Analysis

Business can be classified by regions, products or services, types of customers and more; each classification is treated as one segment of the business. Revenues earn from different segments individually, are called segment revenue. Segment revenues are determined from the invoiced data entered in the accounting system. Segment analysis is done to analyze the contribution of different segments to the total operating performance of the company. It is done with the help of horizontal and vertical comparisons.

Horizontal Analysis

This analysis is done to show the trend of various components in financial statements over a period of time. The earliest period is used as the base period and components of financial statements of later periods are compared with the components of the base period.

Vertical analysis

Vertical analysis is the method of financial statement analysis, and it is useful to evaluating a company’s performance and financial condition. Vertical analysis is helpful for analyzing the changes in the financial statements over the time, and comparing the each item on a financial statement with a total amount from the same statement.

To prepare: Horizontal analysis of the revenue of M Corporation from different brand of restaurants

(b)

To determine

To prepare: Vertical analysis of the revenue earned from different brand restaurants.

(c)

To determine

To draw: The conclusion from the analysis.

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Answer 5

Chapter 5, Problem 5.27EX

(a)

To determine

Segment Analysis

Business can be classified by regions, products or services, types of customers and more; each classification is treated as one segment of the business. Revenues earn from different segments individually, are called segment revenue. Segment revenues are determined from the invoiced data entered in the accounting system. Segment analysis is done to analyze the contribution of different segments to the total operating performance of the company. It is done with the help of horizontal and vertical comparisons.

Horizontal Analysis

This analysis is done to show the trend of various components in financial statements over a period of time. The earliest period is used as the base period and components of financial statements of later periods are compared with the components of the base period.

Vertical analysis

Vertical analysis is the method of financial statement analysis, and it is useful to evaluating a company’s performance and financial condition. Vertical analysis is helpful for analyzing the changes in the financial statements over the time, and comparing the each item on a financial statement with a total amount from the same statement.

To prepare: Horizontal analysis of the revenue of M Corporation from different brand of restaurants

(b)

To determine

To prepare: Vertical analysis of the revenue earned from different brand restaurants.

(c)

To determine

To draw: The conclusion from the analysis.

Answer 6

Chapter 5, Problem 5.27EX

(a)

To determine

Segment Analysis

Business can be classified by regions, products or services, types of customers and more; each classification is treated as one segment of the business. Revenues earn from different segments individually, are called segment revenue. Segment revenues are determined from the invoiced data entered in the accounting system. Segment analysis is done to analyze the contribution of different segments to the total operating performance of the company. It is done with the help of horizontal and vertical comparisons.

Horizontal Analysis

This analysis is done to show the trend of various components in financial statements over a period of time. The earliest period is used as the base period and components of financial statements of later periods are compared with the components of the base period.

Vertical analysis

Vertical analysis is the method of financial statement analysis, and it is useful to evaluating a company’s performance and financial condition. Vertical analysis is helpful for analyzing the changes in the financial statements over the time, and comparing the each item on a financial statement with a total amount from the same statement.

To prepare: Horizontal analysis of the revenue of M Corporation from different brand of restaurants

Answer 7

Chapter 5, Problem 5.27EX

(a)

To determine

Segment Analysis

Business can be classified by regions, products or services, types of customers and more; each classification is treated as one segment of the business. Revenues earn from different segments individually, are called segment revenue. Segment revenues are determined from the invoiced data entered in the accounting system. Segment analysis is done to analyze the contribution of different segments to the total operating performance of the company. It is done with the help of horizontal and vertical comparisons.

Horizontal Analysis

This analysis is done to show the trend of various components in financial statements over a period of time. The earliest period is used as the base period and components of financial statements of later periods are compared with the components of the base period.

Vertical analysis

Vertical analysis is the method of financial statement analysis, and it is useful to evaluating a company’s performance and financial condition. Vertical analysis is helpful for analyzing the changes in the financial statements over the time, and comparing the each item on a financial statement with a total amount from the same statement.

To prepare: Horizontal analysis of the revenue of M Corporation from different brand of restaurants

Answer 8

(b)

To determine

To prepare: Vertical analysis of the revenue earned from different brand restaurants.

Answer 9

(b)

To determine

To prepare: Vertical analysis of the revenue earned from different brand restaurants.

Answer 10

(c)

To determine

To draw: The conclusion from the analysis.

Answer 11

(c)

To determine

To draw: The conclusion from the analysis.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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Solution Summary: The author explains that segment revenue is determined from invoiced data entered in the accounting system. Horizontal analysis is done to show the trend of various components in financial statements over a period of time.

To prepare: Vertical analysis of the revenue earned from different brand restaurants.

To draw: The conclusion from the analysis.

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Chapter 5 Solutions