Jill Akerley is concerned about her company's financial performance and financial position. She has obtained the financial statement of her largest competitor, Nova Inc. and notes that the company is over ten times larger than hers, so it is making the numbers difficult to compare. Below is condensed financial information from Nova Inc. and Scotia Inc.: Nova Inc. and Scotia Inc. Income Statements For the years ended August 31, 2024 NOVA SCOTIA Sales $5,000,000 $400,000 Cost of goods sold Gross profit Operating expenses Operating income 2,100,000 120,000 2,900,000 280,000 2,200,000 130,000 700,000 150,000 Interest expense 60,000 10.000 Income before taxes 640,000 140,000 Income taxes 150,000 30,000 Net income $490,000 $110,000 Required: USING MS EXCEL a. Prepare a vertical analysis for the companies calculating the relative percentages of each item in the financial statements. (Round your answers to the nearest tenth of a percent, ie 0.13578 → 13.6%) b. Comment on the common-sized income statements of the companies (prepared in part a.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Jill Akerley is concerned about her company's financial performance and financial position. She has
obtained the financial statement of her largest competitor, Nova Inc. and notes that the company is over ten
times larger than hers, so it is making the numbers difficult to compare.
Below is condensed financial information from Nova Inc. and Scotia Inc.:
Nova Inc. and Scotia Inc.
Income Statements
For the years ended August 31, 2024
NOVA
SCOTIA
Sales
$5,000,000
$400,000
Cost of goods sold
2,100,000
120,000
Gross profit
2,900,000
280,000
Operating expenses
2,200,000
130,000
Operating income
700,000
150,000
Interest expense
60,000
10,000
Income before taxes
640,000
140,000
Income taxes
150,000
30,000
Net income
$490,000
$110,000
Required: USING MS EXCEL
a. Prepare a vertical analysis for the companies calculating the relative percentages of each item in the
financial statements. (Round your answers to the nearest tenth of a percent, ie 0.13578 → 13.6%)
b. Comment on the common-sized income statements of the companies (prepared in part a.
Transcribed Image Text:Jill Akerley is concerned about her company's financial performance and financial position. She has obtained the financial statement of her largest competitor, Nova Inc. and notes that the company is over ten times larger than hers, so it is making the numbers difficult to compare. Below is condensed financial information from Nova Inc. and Scotia Inc.: Nova Inc. and Scotia Inc. Income Statements For the years ended August 31, 2024 NOVA SCOTIA Sales $5,000,000 $400,000 Cost of goods sold 2,100,000 120,000 Gross profit 2,900,000 280,000 Operating expenses 2,200,000 130,000 Operating income 700,000 150,000 Interest expense 60,000 10,000 Income before taxes 640,000 140,000 Income taxes 150,000 30,000 Net income $490,000 $110,000 Required: USING MS EXCEL a. Prepare a vertical analysis for the companies calculating the relative percentages of each item in the financial statements. (Round your answers to the nearest tenth of a percent, ie 0.13578 → 13.6%) b. Comment on the common-sized income statements of the companies (prepared in part a.
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