ACCOUNTING-W/CENGAGENOWV2 ACCESS
26th Edition
ISBN: 9781305716780
Author: WARREN
Publisher: CENGAGE L
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Chapter 17, Problem 17.1EX
To determine
Vertical Analysis
Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. This analysis is otherwise called as common-size statement.
Formula:
To prepare: Comparative income statement for the two-year period.
Given info: Income statement for the two year period.
2.
To determine
To comment: Significant relationships revealed by the vertical analysis.
Expert Solution & Answer
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Students have asked these similar questions
b. The vertical analysis indicates that the cost of goods sold as a percent of sales
by 8 percentage points, while selling expenses
- by 4 percentage points, and administrative expenses
by 1 percentage points. Thus, net income as a percent of
sales
by 3 percentage points.
What is the
Vertical Analysis of Income Statement
Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:
Current Year
Previous Year
Sales
$4,000,000
$3,600,000
Cost of goods sold
2,280,000
1,872,000
Selling expenses
600,000
648,000
Administrative expenses
520,000
360,000
Income tax expense
240,000
216,000
a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. Round to the nearest whole percentage.
Innovation Quarter Inc.
Comparative Income Statement
For the Years Ended December 31
Current yearAmount
Current yearPercent
Previous yearAmount
Previous yearPercent
Sales
$4,000,000
%
$3,600,000
%
Cost of goods sold
(2,280,000)
%
(1,872,000)
%
$
%
$
%
Selling expenses
$(600,000)
%
$(648,000)
%
Administrative expenses
(520,000)
%
(360,000)
%
$
%
$
%
$
%
$
%
Income tax expense
(240,000)
%
(216,000)
%
$
%
$
%
b.…
Chapter 17 Solutions
ACCOUNTING-W/CENGAGENOWV2 ACCESS
Ch. 17 - Prob. 1DQCh. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - How would the current and quick ratios of a...Ch. 17 - a. Why is it advantageous to have a high inventory...Ch. 17 - What do the following data, taken from a...Ch. 17 - a. How does the rate earned on total assets differ...Ch. 17 - Kroger, a grocery store, recently had a...Ch. 17 - Prob. 9DQCh. 17 - Prob. 10DQ
Ch. 17 - Horizontal analysis The comparative temporary...Ch. 17 - Prob. 17.1BPECh. 17 - Vertical analysis Income statement information for...Ch. 17 - Vertical analysis Income statement information for...Ch. 17 - Prob. 17.3APECh. 17 - Prob. 17.3BPECh. 17 - Accounts receivable analysis A company reports the...Ch. 17 - Accounts receivable analysis A company reports the...Ch. 17 - Inventory analysis A company reports the...Ch. 17 - Inventory analysis A company reports the...Ch. 17 - Prob. 17.6APECh. 17 - Prob. 17.6BPECh. 17 - Times interest earned A company reports the...Ch. 17 - Times interest earned A company reports the...Ch. 17 - Asset turnover A company reports the following:...Ch. 17 - Asset turnover A company reports the following:...Ch. 17 - Return on total assets A company reports the...Ch. 17 - Return on total assets A company reports the...Ch. 17 - Common stockholders profitability analysis A...Ch. 17 - Common stockholders profitability analysis A...Ch. 17 - Prob. 17.11APECh. 17 - Prob. 17.11BPECh. 17 - Prob. 17.1EXCh. 17 - Vertical analysis of income statement The...Ch. 17 - Common-sized income statement Revenue and expense...Ch. 17 - Vertical analysis of balance sheet Balance sheet...Ch. 17 - Prob. 17.5EXCh. 17 - Prob. 17.6EXCh. 17 - Prob. 17.7EXCh. 17 - Prob. 17.8EXCh. 17 - Accounts receivable analysis The following data...Ch. 17 - Accounts receivable analysis Xavier Scores Company...Ch. 17 - Inventory analysis The following data were...Ch. 17 - Prob. 17.12EXCh. 17 - Ratio of liabilities to stockholders equity and...Ch. 17 - Ratio of liabilities to stockholders equity and...Ch. 17 - Ratio of liabilities to stockholders equity and...Ch. 17 - Prob. 17.16EXCh. 17 - Profitability ratios The following selected data...Ch. 17 - Profitability ratios Ralph Lauren Corporation...Ch. 17 - Six measures of solvency or profitability The...Ch. 17 - Six measures of solvency or profitability The...Ch. 17 - Prob. 17.21EXCh. 17 - Prob. 17.22EXCh. 17 - Earnings per share, discontinued operations The...Ch. 17 - Prob. 17.24EXCh. 17 - Prob. 17.25EXCh. 17 - Prob. 17.26EXCh. 17 - Horizontal analysis of income statement For 2016,...Ch. 17 - Prob. 17.2APRCh. 17 - Prob. 17.3APRCh. 17 - Nineteen measures of solvency and profitability...Ch. 17 - Prob. 17.5APRCh. 17 - Prob. 17.1BPRCh. 17 - Prob. 17.2BPRCh. 17 - Effect of transactions on current position...Ch. 17 - Nineteen measures of solvency and profitability...Ch. 17 - Solvency and profitability trend analysis Crosby...Ch. 17 - Nike, Inc., Problem Financial Statement Analysis...Ch. 17 - Prob. 17.1CPCh. 17 - Prob. 17.2CPCh. 17 - Vertical analysis The condensed income statements...Ch. 17 - Prob. 17.4CPCh. 17 - Comprehensive profitability and solvency analysis...
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