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FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Below are the two basic financial statements of Chiz Trading Company. You are tasked to prepare an analysis using Horizontal and Vertical Analysis of their two-dated financial statements. In addition to this you have been tasked to prepare financial ratios measuring the company’s:

  1. Liquidity Status
    1. Current Ratios
    2. Quick Asset Ratios
  2. Efficiency Status
    1. Asset Turnover
    2. Fixed Asset Turnover
    3. Inventory Turnover
    4. Days in Inventory
    5. Accounts Receivable Turnover
    6. Days in Receivable
  3. Profitability Status:
    1. Gross Profit margin Ratio
    2. Operating Income Ratio
    3. Net Profit Ratio
    4. Return on Assets
    5. Return on Equity

 

 

Chiz Trading Company Comparative Statement of Financial Position For the Years Ended December 31, 2021 and 2021 Horizontal Analysis 2022 2021 Inc (dec) % Change Amount Assets Current Assets: Cash & Cash Equivalents P12,445 5,000 8,000 P1,060 Trading Securities Trade and Other Receivables 3,000 Merchandise Inventory 4,000 5,000 Prepaid Expenses 480 300 Total Current Assets P29,925 P9,360 Non-Current Assets: Investment in Dacanay Corporation Property, Plant & Equipment (Net of Accumulated Depreciation): Building Office Equipment P8,000 P10,000 P47,000 P50,000 12,000 16,000 15,000 Furniture and Fixtures 15,640 Total Non-current Assets P83,000 P90,640 Total Assets P112,925 P100,000 =====3= Liabilities and Owner's Equity Current Liabilities Trade and Other Payables Income Tax Payable Accrued Expenses P4,200 P1,675 5,300 5,825 450 300 Total Current Liabilities P9,950 P7,800 Non-Current Liability Loans Payable (payable 2024) 36,775 50,000 Total Liabilities P46,725 P57,800 Owner's Equity P66,200 P42,200 Total Liabilities and Owner's Equity P112,925 P100,000 ======= ======
Transcribed Image Text:Chiz Trading Company Comparative Statement of Financial Position For the Years Ended December 31, 2021 and 2021 Horizontal Analysis 2022 2021 Inc (dec) % Change Amount Assets Current Assets: Cash & Cash Equivalents P12,445 5,000 8,000 P1,060 Trading Securities Trade and Other Receivables 3,000 Merchandise Inventory 4,000 5,000 Prepaid Expenses 480 300 Total Current Assets P29,925 P9,360 Non-Current Assets: Investment in Dacanay Corporation Property, Plant & Equipment (Net of Accumulated Depreciation): Building Office Equipment P8,000 P10,000 P47,000 P50,000 12,000 16,000 15,000 Furniture and Fixtures 15,640 Total Non-current Assets P83,000 P90,640 Total Assets P112,925 P100,000 =====3= Liabilities and Owner's Equity Current Liabilities Trade and Other Payables Income Tax Payable Accrued Expenses P4,200 P1,675 5,300 5,825 450 300 Total Current Liabilities P9,950 P7,800 Non-Current Liability Loans Payable (payable 2024) 36,775 50,000 Total Liabilities P46,725 P57,800 Owner's Equity P66,200 P42,200 Total Liabilities and Owner's Equity P112,925 P100,000 ======= ======
Chiz Trading Company Comparative Statement of Comprehensive Income For the Years Ended December 31, 2021 and 2021 (In Thousand Pesos) Horizontal Analysis 2022 2021 Inc (dec) % Change Amount Sales P240.00 P200.00 Less: Cost of Sales 182.00 140.00 Gross Profit P58.00 Р60.00 Less: Operating Expenses Selling General and Administrative P17.00 P18.00 11.80 14.00 Total Operating Expenses P28.80 P32.00 Net Operating Income Add: Other Income & Expenses P29.20 P28.00 Interest Income P7.50 P4.80 Interest Expense (7.40) (9.50) Net Income P29.30 P23.30 =====%3D ====== Chiz Trading Company Comparative Statement of Comprehensive Income For the Years Ended December 31, 2021 and 2021 (In Thousand Pesos) Vertical Analysis 2022 2021 Sales P240.00 P200.00 Less: Cost of Sales 182.00 140.00 Gross Profit Less: Operating Expenses Selling P58.00 Р60.00 P17.00 P18.00 General and Administrative 11.80 14.00 Total Operating Expenses P28.80 Р32.00 Net Operating Income Add: Other Income & Expenses P29.20 P28.00 Interest Income P7.50 P4.80 Interest Expense (7.40) (9.50) Net Income P29.30 P23.30 ===== ======
Transcribed Image Text:Chiz Trading Company Comparative Statement of Comprehensive Income For the Years Ended December 31, 2021 and 2021 (In Thousand Pesos) Horizontal Analysis 2022 2021 Inc (dec) % Change Amount Sales P240.00 P200.00 Less: Cost of Sales 182.00 140.00 Gross Profit P58.00 Р60.00 Less: Operating Expenses Selling General and Administrative P17.00 P18.00 11.80 14.00 Total Operating Expenses P28.80 P32.00 Net Operating Income Add: Other Income & Expenses P29.20 P28.00 Interest Income P7.50 P4.80 Interest Expense (7.40) (9.50) Net Income P29.30 P23.30 =====%3D ====== Chiz Trading Company Comparative Statement of Comprehensive Income For the Years Ended December 31, 2021 and 2021 (In Thousand Pesos) Vertical Analysis 2022 2021 Sales P240.00 P200.00 Less: Cost of Sales 182.00 140.00 Gross Profit Less: Operating Expenses Selling P58.00 Р60.00 P17.00 P18.00 General and Administrative 11.80 14.00 Total Operating Expenses P28.80 Р32.00 Net Operating Income Add: Other Income & Expenses P29.20 P28.00 Interest Income P7.50 P4.80 Interest Expense (7.40) (9.50) Net Income P29.30 P23.30 ===== ======
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