Vertical Analysis • Financial Ratio
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 3PB: The income statement comparison for Rush Delivery Company shows the income statement for the current...
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Question
REQUIRED:
• Vertical Analysis
• Financial Ratio
![HORIZONTAL ANALYSIS
2
3
4
5 Sales
6 Cost of Goods Sold
7 Gross Margin
8 Less: Operating Expenses
9 Operating Profit
10 Less: Interest Expense
11 Net Income Before Tax
12 Tax
13 Net income After Tax
14
16
17
18 Assets
19 Current Assets:
20
21
22
23
24
25 Noncurrent Assets:
26
27
28 Total Assets
29
30 Liabilities and Equity
31 Current Liabilities
32
33 Noncurrent Liabilties
34
35 Total Liabilities
36 Shareholder's Equity
37
38
39
40 Total Shareholders Equity
41 Total Liabilities and Equity
42
Statement of Comprehensive Income
2014
2013
Cash
Accounts Receivable
Inventory
Prepaid Expense
Total Current Assets
Current Liabilities
Bonds Payable
10,000,000
6,500,000
3,500,000
2,630,000
870,000
Property, Plant and Equipment
Total Noncurrent Asset
120,000
750,000
225,000
525,000
Statement of Financial Position
Preference Shares Capital
Ordinary Share Capital
Retained Earnings
7,500,000
4,500,000
3,000,000
2,280,000
720,000
120,000
600,000
180,000
420,000
2014
100,000
750,000
1,500,000
50,000
2,400,000
2,585,000
2,585,000
4,985,000
1,250,000
1,000,000
2,250,000
750,000
500,000
1,485,000
2,735,000
4,985,000
Difference
2,500,000
2,000,000
500,000
350,000
150,000
2013 Difference
200,000-
400,000
600,000
50,000
1,250,000
150,000
45,000
105,000
500,000
1,000,000
1,500,000
2,700,000 - 115,000
2,700,000
115,000
3,950,000
1,035,000
750,000
500,000
100,000
350,000
900,000
1,200,000
2,450,000
3,950,000
1,150,000
750,000
750,000
.
285,000
285,000
1,035,000
%
33.33%
44.44%
16.67%
15.35%
20.83%
0.00%
25.00%
25.00%
25.00%
%
-50.00%
87.50%
150.00%
0.00%
92.00%
-4.26%
-4.26%
26.20%
150.00%
0.00%
50.00%
0.00%
0.00%
23.75%
11.63%
26.20%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F433333ce-a68c-4d8b-9aaf-12afa0d86173%2Fe5da639e-7bac-49ac-abcf-bf0c0898ca0b%2Fubsmhysr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:HORIZONTAL ANALYSIS
2
3
4
5 Sales
6 Cost of Goods Sold
7 Gross Margin
8 Less: Operating Expenses
9 Operating Profit
10 Less: Interest Expense
11 Net Income Before Tax
12 Tax
13 Net income After Tax
14
16
17
18 Assets
19 Current Assets:
20
21
22
23
24
25 Noncurrent Assets:
26
27
28 Total Assets
29
30 Liabilities and Equity
31 Current Liabilities
32
33 Noncurrent Liabilties
34
35 Total Liabilities
36 Shareholder's Equity
37
38
39
40 Total Shareholders Equity
41 Total Liabilities and Equity
42
Statement of Comprehensive Income
2014
2013
Cash
Accounts Receivable
Inventory
Prepaid Expense
Total Current Assets
Current Liabilities
Bonds Payable
10,000,000
6,500,000
3,500,000
2,630,000
870,000
Property, Plant and Equipment
Total Noncurrent Asset
120,000
750,000
225,000
525,000
Statement of Financial Position
Preference Shares Capital
Ordinary Share Capital
Retained Earnings
7,500,000
4,500,000
3,000,000
2,280,000
720,000
120,000
600,000
180,000
420,000
2014
100,000
750,000
1,500,000
50,000
2,400,000
2,585,000
2,585,000
4,985,000
1,250,000
1,000,000
2,250,000
750,000
500,000
1,485,000
2,735,000
4,985,000
Difference
2,500,000
2,000,000
500,000
350,000
150,000
2013 Difference
200,000-
400,000
600,000
50,000
1,250,000
150,000
45,000
105,000
500,000
1,000,000
1,500,000
2,700,000 - 115,000
2,700,000
115,000
3,950,000
1,035,000
750,000
500,000
100,000
350,000
900,000
1,200,000
2,450,000
3,950,000
1,150,000
750,000
750,000
.
285,000
285,000
1,035,000
%
33.33%
44.44%
16.67%
15.35%
20.83%
0.00%
25.00%
25.00%
25.00%
%
-50.00%
87.50%
150.00%
0.00%
92.00%
-4.26%
-4.26%
26.20%
150.00%
0.00%
50.00%
0.00%
0.00%
23.75%
11.63%
26.20%
![Value Plus, Inc. was organized several years ago to develop and market
computer software programs. The company is small but growing and you are
considering the purchase of some of its ordinary shares as an investment. The
following data on the company is available for the past two years:
Sales
Cost of Goods Sold
Gross Margin
Less: Operating Expenses
Operating Profit
Less: Interest Expense
Net Income Before Tax
Tax
Net income After Tax
Assets
Current Assets:
Cash
Accounts Receivable
Inventory
Prepaid Expense
Total Current Assets
Noncurrent Assets:
Total Assets
Property, Plant and Equipment
Total Noncurrent Asset
Liabilities and Equity
Current Liabilities
Statement of Comprehensive Income
2014
Current Liabilities
Noncurrent Liabilties
Bonds Payable
Total Liabilities
Shareholder's Equity
Total Shareholders Equity
Total Liabilities and Equity
Preference Shares Capital
Ordinary Share Capital
Retained Earnings
10,000,000
6,500,000
3,500,000
2,630,000
870,000
120,000
750,000
Statement of Financial Position
225,000
525,000
2014
100000
750000
1500000
50000
2400000
2585000
2585000
4985000
1250000
1000000
2250000
750000
500000
1485000
2735000
4985000
2013
7,500,000
4,500,000
3,000,000
2,280,000
720,000
120,000
600,000
180,000
420,000
2013
200000
400000
600000
50000
1250000
2700000
2700000
3950000
500000
1000000
1500000
750000
500000
1200000
2450000
3950000
Prepare the following financial statement analysis tool:
1. Horizontal Analysis- DONE/PROVIDED
2. Vertical Analysis
3. Financial Ratio](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F433333ce-a68c-4d8b-9aaf-12afa0d86173%2Fe5da639e-7bac-49ac-abcf-bf0c0898ca0b%2Fsr4nx4m_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Value Plus, Inc. was organized several years ago to develop and market
computer software programs. The company is small but growing and you are
considering the purchase of some of its ordinary shares as an investment. The
following data on the company is available for the past two years:
Sales
Cost of Goods Sold
Gross Margin
Less: Operating Expenses
Operating Profit
Less: Interest Expense
Net Income Before Tax
Tax
Net income After Tax
Assets
Current Assets:
Cash
Accounts Receivable
Inventory
Prepaid Expense
Total Current Assets
Noncurrent Assets:
Total Assets
Property, Plant and Equipment
Total Noncurrent Asset
Liabilities and Equity
Current Liabilities
Statement of Comprehensive Income
2014
Current Liabilities
Noncurrent Liabilties
Bonds Payable
Total Liabilities
Shareholder's Equity
Total Shareholders Equity
Total Liabilities and Equity
Preference Shares Capital
Ordinary Share Capital
Retained Earnings
10,000,000
6,500,000
3,500,000
2,630,000
870,000
120,000
750,000
Statement of Financial Position
225,000
525,000
2014
100000
750000
1500000
50000
2400000
2585000
2585000
4985000
1250000
1000000
2250000
750000
500000
1485000
2735000
4985000
2013
7,500,000
4,500,000
3,000,000
2,280,000
720,000
120,000
600,000
180,000
420,000
2013
200000
400000
600000
50000
1250000
2700000
2700000
3950000
500000
1000000
1500000
750000
500000
1200000
2450000
3950000
Prepare the following financial statement analysis tool:
1. Horizontal Analysis- DONE/PROVIDED
2. Vertical Analysis
3. Financial Ratio
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