Chapter 17, Problem P17.37CT

To determine

Horizontal Analysis:

Horizontal analysis is a method financial statement analysis which compares the components available in the financial statements of over specified period.

Vertical Analysis:

Vertical analysis of income statement is performed by computing percentage of revenues and expenses with the net sale during the same period.

Ratio Analysis:

The financial ratios which indicates the performance of a business operationally and financially is called ratio analysis.

To determine:

1. Performing a horizontal analysis on the balance sheet of Riverside Sweets for the year 2018 and 2019.

2. Performing vertical analysis on the income statement of Riverside Sweets.

3. Computation of Ratios:

a. Working Capital

b. Current Ratio

c. Acid-Test Ratio

d. Cash Ratio

e. Accounts Receivable Turnover

f. Days’ Sales in Receivables

g. Inventory Turnover

h. Days’ Sales in Inventory

i. Gross Profit Percentage

j. Debt Ratio

k. Debt to Equity Ratio

l. Times-Interest-Earned Ratio

m. Profit Margin Ratio

n. Rates of Return on Total Assets

o. Asset Turnover Ratio

p. Rate of Return on Common Stockholders’ Equity

q. Earnings per Share

r. Price/Earnings Ratio

s. Dividend Yield

t. Dividend Payout