Summarize your analysis. 4. What was the payable turnover for Excitingpart's Closet? How did it affect the problem?(Including computation)4) Payable Tumover Kattoe :Net Credit PurchocePayabto Turnover Kortto =Avorage kccovnt Rayobletere,CO G6 - Operoting Clech + Purchate s - closing Stock$ 200.000 = $ 100. 000 Purchates -& G00 co00Parchaces = 4 500,000Average Account Payable, Opreningt Clacing26 401 , 00 otsto,000: $ 150.0oThus, Account Paya ble Turnover Katros SS00 c0 01-11$16a000It determines how much times the company is able to pay its creditors. The ratio is lower, thismeans that the company is not able to repay its debt.5. What factors lead to the low cash balance for Excitingpart's Closet?Factors lead to low cash balance:Purchase of new machinery for cash results in low cash balance.Increase in account receivable balance. This means the company is unable to realise thecredit sales made.6. Is Excitingpart's Closet profitable? (Including computation)6) pro pit abl lity!Operoting Ratro =Operating mcomecalesYear 20 14 = 270,000* 100 = 46%( G00.000Year 20 16 = $ 100 . 000 x lo0 = 50°(04 800 :000Yes, the company is profitable as there is increase in sales value and also increase in operatingprofit ratio by 5% as compared to last year.7. Is the company heavily financed by debt or equity? (Including computation)The Excitingparts Closet is all equity funded company, it does not have debt. The total equity for2015 is 1,800,000 and for 2014 it was 1,520,000. There are not any long-term debts outstandingfor the company during 2015 or 2014. 8. Compute the horizontal and vertical analysis.Horizontal Analysis2014Particulars2015Difference% DifferenceIncrease (Deerease)(e-a-b)(a)(b)(сЪ x 100)Income StatementSales800.000 600,000200.00033%Less: Cost of Goods Sold300,000 225,00075.00033%Less: Operating ExpenseOperating IncomeMachinery100.000105,000-5,000-5%400,000270.000130.00048%120,00081,00039,00048%Net Income280,000189,00091.00048%Statements of Financial PositionAssets:Cash60.000270.000-210.000-78%Accounts ReceivableInventoryMachinery740.000500,000240,00048%600.000 400,000200.00050%-50,000180.000800.000 850,000-6%Total Assets2.200.000 2.020.0009%Liabilities:Accounts Payable-100,000-100.000400,000 500,000-20%Total Liabilities400,000 500,000-20%Equity:0%Capital StockAccumulated ProftTotal EquityTotal Liabilities and Equity200.000 200,0001,600,000 1.320,000280,00021%1.800.000 1,520.000280.00018%2,200,000 2,02e,000180,0009%Vertical AnalysisParticulars20152014(a)(a/S00,000)(b)(b600,000)Income StatementSales800,000100% 600,000100%Less: Cost of Goods Sold300,00038% 225,00038%Less: Operating ExpenseOperating IncomeMachineryNet Income13% 105,00050% 270,000100,00018%400,000120,00045%15%81,00014%280,00035% 189,00032%Statements of Financial PositionAssets:(a/2,200,000)(a/2,020,000)Cash60,0003% 270,00013%Accounts Receivable740,00034% 500,00025%InventoryMachineryTotal Assets600,00027% 400,00020%800,00036% 850,00042%2,200,000100% 2,020,000100%Liabilities:18% 500,00018% 500,000Accounts Payable400,00025%Total Liabilities400,00025%Equity:Capital StockAccumulated Proft200,0009% 200,00010%1,600,00073% 1,320,00082% 1,520,000100% 2,020,00065%Total EquityTotal Liabilities and Equity1,800,0002,200,00075%100%9. What will be your recommendations/changes that must be done to the operations ofExcitingpart's Closet?Recommendation to the Company: The company must increase its cash collection and balance asit has been decreased to 3% of the total asset (vertical analysis). The investment in the accountsreceivable and inventory should be decreased.

Here discuss about the details of financial statement analysis which are incurred to the business…

4. What was the payable turnover for Excitingpart's Closet? How did it affect the problem? (Including computation) 4) Payable Tumover Kattoe: Net Credit Purchoce Auerage tecount Payo ble fayabto Tumover kotto = tere, CO G6 - Operoting seck + Purchate s - $ 300.000 = $ 100. 000 + Purchatte - & G00 co00 clocrng stock