Greg has operated his shop for 2 years. He buys coffee from a local supplier and bakes the cinnamon rolls in-house. Your business consists of catering events and selling fine mixers. The plan is for you to use the premises Greg currently rents to give you an opportunity to display your cakes and demonstrate the mixers that you sell. You will also hire, train, and supervise staff to bake cookies and muffins sold in the shop. By offering a greater variety of baked goods, both of you would benefit. Another advantage is that the coffee shop will have one central location for selling the mixers. However, you want to have a better understanding of his growth, so you ask to see is balance sheets for the past two years. His comparative balance sheets are as follows: Greg's Cinnamon Rolls Condensed Balance Sheet 31-Oct 2021 2020 Assets Current Assets $10,360 $8,602 Property, plant, and equipment (net) 2,500 2,256 Other assets 1,480 1,782 Total assets $14,340 $12,640 Liabilities and Stockholders' Equity Current Liabilities $3,290 $3,390 Long-term liabilities 1,470 1,300 Stockholders’ equity 9,580 7,950 Total liabilities and stockholders' equity $14,340 $12,640 Required part A Prepare a horizontal analysis of the balance sheet data for Greg's' Cinnamon Rolls, using 2020 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.) Prepare a vertical analysis of the balance sheet data for Greg's' Cinnamon Rolls for 2021
Greg has operated his shop for 2 years. He buys coffee from a local supplier and bakes the cinnamon rolls in-house. Your business consists of catering events and selling fine mixers. The plan is for you to use the premises Greg currently rents to give you an opportunity to display your cakes and demonstrate the mixers that you sell. You will also hire, train, and supervise staff to bake cookies and muffins sold in the shop. By offering a greater variety of baked goods, both of you would benefit. Another advantage is that the coffee shop will have one central location for selling the mixers. However, you want to have a better understanding of his growth, so you ask to see is balance sheets for the past two years.
His comparative balance sheets are as follows:
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Greg's Cinnamon Rolls |
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Condensed |
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31-Oct |
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2021 |
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2020 |
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Assets |
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Current Assets |
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$10,360 |
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$8,602 |
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Property, plant, and equipment (net) |
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2,500 |
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2,256 |
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Other assets |
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1,480 |
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1,782 |
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Total assets |
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$14,340 |
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$12,640 |
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Liabilities and |
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|
|
|
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Current Liabilities |
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$3,290 |
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$3,390 |
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Long-term liabilities |
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1,470 |
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1,300 |
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Stockholders’ equity |
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9,580 |
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7,950 |
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Total liabilities and stockholders' equity |
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$14,340 |
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$12,640 |
Required part A
- Prepare a horizontal analysis of the balance sheet data for Greg's' Cinnamon Rolls, using 2020 as a base. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)
- Prepare a vertical analysis of the balance sheet data for Greg's' Cinnamon Rolls for 2021
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