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Analysis 1: Income Statement (Horizontal) Report
At the beginning, there is a $33,205.50 difference between the 2022 and 2023 periods. However, in 2023, Casey Corporation suffered more losses in money, resulting in a much smaller gap by the end of the year. Sales returns and sales discounts accumulated to a $6,709.01 decrease, totaling $26,496.49, which quickly bumped to $27,091.49 due to a $595 increase in the cost of merchandise sold. Both selling and administrative expenses made a combined loss of $18,066.56, bringing the net income down to $9,024.93. A $4,568.66 decrease
from interest expenses closed the period gap further to $3,373.77. Subtracting $1,928.00 from that number due to corporate income tax brings the final total to a measly $1,445.77 change difference between 2022 and 2023.
Analysis 2: Income Statement (Vertical) Report
Based on the vertical analysis, the 2023 period was more profitable than the prior 2022 period. There is 30.55% of gross profit for 2023; a favorable change to 2022’s 28.26%. Net income after tax also declined from last year’s 8.40% to the current year’s 8.31%. This is also supported by the operating revenue increasing from 16.33% to 17.94%.
Analysis 3: Balance Sheet (Horizontal) Report
The 2023 period was more profitable than the 2022 period, with a $61,024.91 change between each period’s assets. Factors such as a $99,660 increase in accounts receivable, $68,562 decrease in merchandise inventory and the $56,216.91 increase in cash contributed to this outcome. Liabilities have also increased as well by $10,113.80. Items such as the $13,290 increase in accounts payable contributed to this total. Stockholder’s equity also increased by $50,911.11, which came from both the net income increase of $1,445.77 and a $49,465.34 increase for retained earnings.
Analysis 4: Balance Sheet (Vertical) Report
All the plant assets had lower profit in 2023 than 2022. For example, the profit for the plant asset of buildings as a percentage was 43.39% in 2023, compared to 2022’s percentage of 47.80%. But the regular assets had enough increase in income to keep 2023’s asset profit ahead
of 2022. Total liabilities in 2023 were 41.85%, which is a decrease in profit compared to last year’s 44.42%. This is balanced by stockholder’s equity, which increased from 2022’s 55.58% to 2023’s 58.15%.
Analysis 5: Ratio Analysis
EARNING PERFORMANCE ANALYSIS
Rate Earned on Average Total Assets
11.26%
Rate Earned on Average Stockholder’s Equity
19.78%
Rate Earned on Net Sales
8.31%
Earnings Per Share
$1.09
Price-Earnings Ratio
4.45 times
EFFICIENCY ANALYSIS
Accounts Receivable Turnover Ratio
7.80 times
Average Days for Payment
47 days
Merchandise Inventory Turnover Ratio
13.58 times
Average Number of Days Sales in Merch Inv.
27 days
SHORT-TERM FINANCIAL STRENGTH ANALYSIS
Working Capital
$193,932.93
Current Ratio
2.63 times
Acid Test Ratio
2.37 times
LONG-TERM FINANCIAL STRENGTH ANALYSIS
Debt Ratio
41.85%
Equity Ratio
58.15%
Equity Per Share
5.91
With both the stockholder’s equity and net sales decreasing from last year’s period, it shows the company is lacking in performance. The company does have average efficiency, since although it takes 47 days (compared to last year’s 31) to collect payment, their turnover ratio has increased to 13.58 times compared to last year’s 9.5 times. The company has great financial
strength, both short and long term, due to both a decrease in debt ratio and increase in working capital.
Analysis 6: Statement of Cash Flows
There is a net increase in $56,216.91, which came from company operations as well as a mortgage payable. Cash was primarily used to buy store and office equipment.
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