Question

Horizontal Analysis The comparative temporary investments and inventory balances of a company follow. Current Year Previous...

Horizontal Analysis

The comparative temporary investments and inventory balances of a company follow.

Current Year Previous Year
Accounts payable $57,630 $51,000
Long-term debt   36,992   54,400

Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis?

Amount of Change Increase/Decrease Percentage
Accounts payable $ %
Long-term debt $ %

Vertical Analysis

Income statement information for Einsworth Corporation follows:

Sales $556,000
Cost of goods sold 155,680
Gross profit 400,320

Prepare a vertical analysis of the income statement for Einsworth Corporation. If required, round percentage answers to the nearest whole number.

Einsworth Corporation
Vertical Analysis of the Income Statement
Amount Percentage
Sales $556,000 %
Cost of goods sold 155,680 %
Gross profit $400,320 %
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Homework Answers

Answer #1

1) Based on this information, what is the amount and percentage of increase or decrease that would be shown on a balance sheet with horizontal analysis?

Amount of Change Increase/Decrease Percentage
Accounts payable $57630-51000 = 6630 Increase 6630/51000 = 13%
Long-term debt $36992-54400 = -17408 Decrease 17408/54400 = -32%

2) Prepare a vertical analysis of the income statement for Einsworth Corporation. If required, round percentage answers to the nearest whole number.

Einsworth Corporation
Vertical Analysis of the Income Statement
Amount Percentage
Sales $556,000 100%
Cost of goods sold 155,680 28%
Gross profit $400,320 72%
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