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HINT: STEP-BY-STEP WALKTHROUGH 1. Horizontal analysis: Create a new sheet within your Excel workbook that you will use to perform the horizontal analysis, comparing each year's income stateme item to its corresponding item in year 1.

HINT: STEP-BY-STEP WALKTHROUGH 1. Horizontal analysis: Create a new sheet within your Excel workbook that you will use to perform the horizontal analysis, comparing each year's income stateme item to its corresponding item in year 1.

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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Common-Size Financial Statement Analysis Using Excel Completing this activity will help you learn to: 1. create Excel formulas using cell references. 2. create absolute cell references to perform calculations efficiently and correctly. 3. apply conditional formatting to highlight cells based on criteria that you specify. Case scenario: You are working at a small business that has been mostly stable. You want to analyze the financial statements of the past five years to examine the trends over time and compare the pertentages of income statement items relative to overall sales. You also want to highlight cells according to whether the calculated ratio increases or decreases more than a specified amount. Required: Download spreadsheet CommonSizeCaseData-c9ccd3.xlsx You will build a spreadsheet that performs common-size analysis using five years of a company's income statements. Specifically, you will create two sheets within the workbook, one for the horizontal analysis and one for the vertical analysis. Further, you will use conditional formatting to visually differentiate between cells that reflect increases and cells that reflect decreases over a specified percentage. HINT: STEP-BY-STEP WALKTHROUGH 1. Horizontal analysis: Create a new sheet within your Excel workbook that you will use to perform the horizontal analysis, comparing each year's income statement item to its corresponding item in year 1.
Transcribed Image Text:Common-Size Financial Statement Analysis Using Excel Completing this activity will help you learn to: 1. create Excel formulas using cell references. 2. create absolute cell references to perform calculations efficiently and correctly. 3. apply conditional formatting to highlight cells based on criteria that you specify. Case scenario: You are working at a small business that has been mostly stable. You want to analyze the financial statements of the past five years to examine the trends over time and compare the pertentages of income statement items relative to overall sales. You also want to highlight cells according to whether the calculated ratio increases or decreases more than a specified amount. Required: Download spreadsheet CommonSizeCaseData-c9ccd3.xlsx You will build a spreadsheet that performs common-size analysis using five years of a company's income statements. Specifically, you will create two sheets within the workbook, one for the horizontal analysis and one for the vertical analysis. Further, you will use conditional formatting to visually differentiate between cells that reflect increases and cells that reflect decreases over a specified percentage. HINT: STEP-BY-STEP WALKTHROUGH 1. Horizontal analysis: Create a new sheet within your Excel workbook that you will use to perform the horizontal analysis, comparing each year's income statement item to its corresponding item in year 1.
Chart Text Shape Media Comment an Line Items Net Sales Less: Cost of Goods Sold Gross Margin Less: Operating Expenses Less: Taxes Year 1 Year 2 Year 4 $220,000.00 Year 3 $200,000.00 Year 5 $250,000.00 $180,000.00 $200,000.00 ($100,000.00) ($90,500.00) ($100,500.00) ($100,000.00) ($120,000.00) $99,500.00 ($60,000.00) ($16,000.00) $23,500.00 $100,000.00 ($50,000.00) ($55,000.00) ($16,000.00) ($14,400.00) $34,000.00 $130,000.00 ($70,000.00) ($20,000.00) $40,000.00 $89,500.00 $120,000.00 ($65,000.00) ($17,000.00) $38,000.00 Net Income $20,100.00
Transcribed Image Text:Chart Text Shape Media Comment an Line Items Net Sales Less: Cost of Goods Sold Gross Margin Less: Operating Expenses Less: Taxes Year 1 Year 2 Year 4 $220,000.00 Year 3 $200,000.00 Year 5 $250,000.00 $180,000.00 $200,000.00 ($100,000.00) ($90,500.00) ($100,500.00) ($100,000.00) ($120,000.00) $99,500.00 ($60,000.00) ($16,000.00) $23,500.00 $100,000.00 ($50,000.00) ($55,000.00) ($16,000.00) ($14,400.00) $34,000.00 $130,000.00 ($70,000.00) ($20,000.00) $40,000.00 $89,500.00 $120,000.00 ($65,000.00) ($17,000.00) $38,000.00 Net Income $20,100.00
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