Question

Perform a vertical analysis and Perform a horizontal analysis on the following information providing both the dollar amount and percentage change:

2018 2017

Cash $500,000 $200,000

Acc Rec 900,000 800,000

Inventory 700,000 500,000

Long-term assets 2,200,000 2,500,000

Total assets $4,300,000 $4,000,000

Answer 1

Vertical analysis :

	2018	2017	Amount increase (decrease)	Percent increase (decrease)
Cash	500000	200000	300000	150%
Acc Rec	900000	800000	100000	12.5%
Inventory	700000	500000	200000	40%
Long term assets	2200000	2500000	-300000	-12%
Total assets	4300000	4000000	300000	7.5%

Horizontal analysis :

	2018	Percent 2018	2017	Percent 2017
Cash	500000	11.63%	200000	5%
Acc Rec	900000	20.93%	800000	20%
Inventory	700000	16.28%	500000	12.5%
Long term assets	2200000	51.16%	2500000	62.5%
Total assets	4300000	100%	4000000	100%