Chapter 17, Problem P17.31BPGB

To determine

Vertical Analysis: The financial analysis tool that shows each amount as the proportion of base amount is called vertical analysis. Revenue and total assets are considered as the base amount and presented as 100% figure in the income statement and balance sheet respectively. It is useful to compare the financials of different companies in the same industry.

1.

To Prepare: Vertical analysis of R Company’s income statement and balance sheet.

To determine

2.

To Compare: R Company’s profit performance and financial position with the average for the industry.