Given the 2 Financial Statements, compute and interpret the following in the correct format:- Horizontal Analysis (Balance Sheet)- Vertical Analysis (Balance Sheet) (2020 & 2019)- Common Size Income Statement (2020)- Quick Ratio- Inventory Turnover- Total Assets Turnover- Debt Ratio- Return on Assets- Return on Equity CashAccounts ReceivableInventoryAssetsTotal Current AssetsGross Plant & Equipmentless: AccumulatedDepreciationNet Plant and EquipmentTotal AssetsLiabilities and EquityAccounts PayableNotes PayableTotal Current LiabilitiesLong Term DebtTotal LiabilitiesCommon StockRetained EarningsTotal EquityTotal Liabilities and Equity2020120,000125,000210,000455,000600,000(115,000)485,000940,000125,000205,000330,000100,000430,000310,000200,000510,000940,000201950,000125,000225,000400,000600,000(75,000)525,000925,000185,000125,000310,000115,000425,000350,000150,000500,000925,000 Salesless: Cost of Goods SoldEBITDADepreciationInterestNet Income2020580,000320,000260,000(115,000)(60,000)85,0002019535,000215,000320,000(75,000)(35,000)210,000

Ratio analysis - A ratio is a tool depicting the relationship between two factors and it can be…

Answered: Given the 2 Financial Statements,…

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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Given the 2 Financial Statements, compute and interpret the following in the correct format:

- Horizontal Analysis (Balance Sheet)

- Vertical Analysis (Balance Sheet) (2020 & 2019)

- Common Size Income Statement (2020)

- Quick Ratio

- Inventory Turnover

- Total Assets Turnover

- Debt Ratio

- Return on Assets

- Return on Equity

Cash
Accounts Receivable
Inventory
Assets
Total Current Assets
Gross Plant & Equipment
less: Accumulated
Depreciation
Net Plant and Equipment
Total Assets
Liabilities and Equity
Accounts Payable
Notes Payable
Total Current Liabilities
Long Term Debt
Total Liabilities
Common Stock
Retained Earnings
Total Equity
Total Liabilities and Equity
2020
120,000
125,000
210,000
455,000
600,000
(115,000)
485,000
940,000
125,000
205,000
330,000
100,000
430,000
310,000
200,000
510,000
940,000
2019
50,000
125,000
225,000
400,000
600,000
(75,000)
525,000
925,000
185,000
125,000
310,000
115,000
425,000
350,000
150,000
500,000
925,000

Sales
less: Cost of Goods Sold
EBITDA
Depreciation
Interest
Net Income
2020
580,000
320,000
260,000
(115,000)
(60,000)
85,000
2019
535,000
215,000
320,000
(75,000)
(35,000)
210,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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