Horizontal Analysis and Vertical Analysis Horizontal Analysis: Horizontal analysis is prepared to make comparison between the financial statements to determine the changes in the financial statements for the previous year to the current year. The changes of the company are measured in dollars as well as in percentage. Formula: Percentage Change = 100 × Later Period Amount − Base Period Amount Base Period Amount Vertical Analysis: Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. Use the following formula to calculate vertical analysis percentage: Formula: Vertical analysis percentage = ( Specific item Base amount ) × 100 This analysis is otherwise called as common-size statement. To prepare: Horizontal analysis of Corporation N’s Comparative Balance Sheets data for 2016 and 2017.

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Answer 1

Question

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.

Chapter 13, Problem 13.5E

a)

To determine

Horizontal Analysis and Vertical Analysis

Horizontal Analysis: Horizontal analysis is prepared to make comparison between the financial statements to determine the changes in the financial statements for the previous year to the current year. The changes of the company are measured in dollars as well as in percentage.

Formula:

Percentage Change=100×Later Period Amount −Base Period AmountBase Period Amount

Vertical Analysis: Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. Use the following formula to calculate vertical analysis percentage:

Formula:

Vertical analysis percentage =(Specific itemBase amount)×100

This analysis is otherwise called as common-size statement.

To prepare: Horizontal analysis of Corporation N’s Comparative Balance Sheets data for 2016 and 2017.

b)

To determine

To prepare: Vertical analysis of Corporation N’s comparative condensed balance sheet data for 2017.

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Baltimore Company experienced an increase in total assets of $12,500 during the current year. During the same time period, total liabilities increased $9,100. Shareholders made no investments during the and no dividends were paid. How much was Baltimore's net income? year

Which of the following statements are true with regard to asset accounts? a. Assets are on the left side of the accounting equation. b. Assets are the right-side of the accounting equation. c. Assets are increased with debits Assets are increased with credits. d. Assets are decreased with debits Assets are decreased with credits.

Answer 2

Question

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.

Chapter 13, Problem 13.5E

a)

To determine

Horizontal Analysis and Vertical Analysis

Horizontal Analysis: Horizontal analysis is prepared to make comparison between the financial statements to determine the changes in the financial statements for the previous year to the current year. The changes of the company are measured in dollars as well as in percentage.

Formula:

Percentage Change=100×Later Period Amount −Base Period AmountBase Period Amount

Vertical Analysis: Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. Use the following formula to calculate vertical analysis percentage:

Formula:

Vertical analysis percentage =(Specific itemBase amount)×100

This analysis is otherwise called as common-size statement.

To prepare: Horizontal analysis of Corporation N’s Comparative Balance Sheets data for 2016 and 2017.

b)

To determine

To prepare: Vertical analysis of Corporation N’s comparative condensed balance sheet data for 2017.

Expert Solution & Answer

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Answer 3

Question

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.

Chapter 13, Problem 13.5E

a)

To determine

Horizontal Analysis and Vertical Analysis

Horizontal Analysis: Horizontal analysis is prepared to make comparison between the financial statements to determine the changes in the financial statements for the previous year to the current year. The changes of the company are measured in dollars as well as in percentage.

Formula:

Percentage Change=100×Later Period Amount −Base Period AmountBase Period Amount

Vertical Analysis: Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. Use the following formula to calculate vertical analysis percentage:

Formula:

Vertical analysis percentage =(Specific itemBase amount)×100

This analysis is otherwise called as common-size statement.

To prepare: Horizontal analysis of Corporation N’s Comparative Balance Sheets data for 2016 and 2017.

b)

To determine

To prepare: Vertical analysis of Corporation N’s comparative condensed balance sheet data for 2017.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

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.

Chapter 13, Problem 13.5E

a)

To determine

Horizontal Analysis and Vertical Analysis

Horizontal Analysis: Horizontal analysis is prepared to make comparison between the financial statements to determine the changes in the financial statements for the previous year to the current year. The changes of the company are measured in dollars as well as in percentage.

Formula:

Percentage Change=100×Later Period Amount −Base Period AmountBase Period Amount

Vertical Analysis: Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. Use the following formula to calculate vertical analysis percentage:

Formula:

Vertical analysis percentage =(Specific itemBase amount)×100

This analysis is otherwise called as common-size statement.

To prepare: Horizontal analysis of Corporation N’s Comparative Balance Sheets data for 2016 and 2017.

b)

To determine

To prepare: Vertical analysis of Corporation N’s comparative condensed balance sheet data for 2017.

Expert Solution & Answer

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Answer 5

Chapter 13, Problem 13.5E

a)

To determine

Horizontal Analysis and Vertical Analysis

Horizontal Analysis: Horizontal analysis is prepared to make comparison between the financial statements to determine the changes in the financial statements for the previous year to the current year. The changes of the company are measured in dollars as well as in percentage.

Formula:

Percentage Change=100×Later Period Amount −Base Period AmountBase Period Amount

Vertical Analysis: Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. Use the following formula to calculate vertical analysis percentage:

Formula:

Vertical analysis percentage =(Specific itemBase amount)×100

This analysis is otherwise called as common-size statement.

To prepare: Horizontal analysis of Corporation N’s Comparative Balance Sheets data for 2016 and 2017.

b)

To determine

To prepare: Vertical analysis of Corporation N’s comparative condensed balance sheet data for 2017.

Answer 6

Chapter 13, Problem 13.5E

a)

To determine

Horizontal Analysis and Vertical Analysis

Horizontal Analysis: Horizontal analysis is prepared to make comparison between the financial statements to determine the changes in the financial statements for the previous year to the current year. The changes of the company are measured in dollars as well as in percentage.

Formula:

Percentage Change=100×Later Period Amount −Base Period AmountBase Period Amount

Vertical Analysis: Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. Use the following formula to calculate vertical analysis percentage:

Formula:

Vertical analysis percentage =(Specific itemBase amount)×100

This analysis is otherwise called as common-size statement.

To prepare: Horizontal analysis of Corporation N’s Comparative Balance Sheets data for 2016 and 2017.

Answer 7

Chapter 13, Problem 13.5E

a)

To determine

Horizontal Analysis and Vertical Analysis

Horizontal Analysis: Horizontal analysis is prepared to make comparison between the financial statements to determine the changes in the financial statements for the previous year to the current year. The changes of the company are measured in dollars as well as in percentage.

Formula:

Percentage Change=100×Later Period Amount −Base Period AmountBase Period Amount

Vertical Analysis: Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. Use the following formula to calculate vertical analysis percentage:

Formula:

Vertical analysis percentage =(Specific itemBase amount)×100

This analysis is otherwise called as common-size statement.

To prepare: Horizontal analysis of Corporation N’s Comparative Balance Sheets data for 2016 and 2017.

Answer 8

b)

To determine

To prepare: Vertical analysis of Corporation N’s comparative condensed balance sheet data for 2017.

Answer 9

b)

To determine

To prepare: Vertical analysis of Corporation N’s comparative condensed balance sheet data for 2017.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 13 - Prob. 1Q Ch. 13 - Prob. 2Q Ch. 13 - Prob. 3Q Ch. 13 - Prob. 4Q Ch. 13 - Prob. 5Q Ch. 13 - Prob. 6Q Ch. 13 - Prob. 7Q Ch. 13 - Prob. 8Q Ch. 13 - Prob. 9Q Ch. 13 - (a) Distinguish among the following bases of...

Solution Summary: The author explains how Horizontal Analysis and Vertical Analysis are prepared to analyze the relationship among various financial statements with a particular base amount.

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To prepare: Vertical analysis of Corporation N’s comparative condensed balance sheet data for 2017.

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