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
2. Performing vertical analysis on the income statement of Riverside Sweets.
3. Computation of Ratios:
a.
b.
c. Acid-Test Ratio
d. Cash Ratio
e.
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.
o. Asset Turnover Ratio
p. Rate of Return on Common
q. Earnings per Share
r. Price/Earnings Ratio
s. Dividend Yield
t. Dividend Payout
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Chapter 17 Solutions
Horngren's Accounting, The Financial Chapters, Student Value Edition Plus MyLab Accounting with Pearson eText - Access Card Package (12th Edition)
- Mead Incorporated began operations in Year 1. Following is a series of transactions and events involving its long-term debt investments in available-for-sale securities. Year 1 January 20 Purchased Johnson & Johnson bonds for $20,500. February 9 Purchased Sony notes for $55,440. June 12 Purchased Mattel bonds for $40,500. December 31 Fair values for debt in the portfolio are Johnson & Johnson, $21,500; Sony, $52,500; and Mattel, $46,350. Year 2 April 15 Sold all of the Johnson & Johnson bonds for $23,500. July 5 Sold all of the Mattel bonds for $35,850. July 22 Purchased Sara Lee notes for $13,500. August 19 Purchased Kodak bonds for $15,300. December 31 Fair values for debt in the portfolio are Kodak, $17,325; Sara Lee, $12,000; and Sony, $60,000. Year 3 February 27 Purchased Microsoft bonds for $160,800. June 21 Sold all of the Sony notes for $57,600. June 30 Purchased Black & Decker bonds for $50,400. August 3 Sold all of the Sara…arrow_forwardWhat is the ending inventory?arrow_forwardMaple industries uses the straight line method solution general accounting questionarrow_forward
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