Question

Q.1 The following information was retrieved from NOOR COMPANY books:

NOOR COMPANY

Comparative Balance Sheet

December 31, 2018 and 2017

	2018	2017
Assets
Current assets	SAR       440	SAR     280
Plant assets	675	520
Total assets	SAR    1,115	SAR     800
Liabilities and stockholders' equity
Current liabilities	SAR       280	SAR     120
Long-term debt	250	160
Common stock	325	320
Retained earnings	260	200
Total liabilities and stockholders' equity	SAR    1,115	SAR     800

Instructions: Using horizontal analysis, calculate the percentage change for each balance sheet item using 2017 as a base year.  

Answer 1

Percentage change in each item is calculated by the following formula:

Percentage change = { (Current year Value - Base year value) / Base Year value } *100

	2018	2017	Percentage change (formula)	Percentage change *
Assets
Current assets	SAR 440	SAR 280	{ ( SAR 440 - SAR 28 0) / SAR 280 } *100	57.14
Plan assets	675	520	{ ( SAR 675 - SAR 520 ) / SAR 520 } *100	29.81
Total assets	SAR 1,115	SAR 800	{ ( SAR 1,115 - SAR 800 ) / SAR 800 } *100	39.38
Liabilities and stockholders' equity
Current liabilities	SAR 280	SAR 120	{ (SAR 280 - SAR 120 ) / SAR 120 } *100	133.33
Long-term debt	250	160	{ ( SAR 250 - SA 160 ) / SAR 160 } *100	56.25
Common stock	325	320	{ ( SAR 325 - SAR 320 ) / SAR 320 } *100	1.56
Retained earnings	260	200	{ ( SAR 260 - SAR 200 ) / SAR 200 } *100	30.00
Total liabilities and stockholders' equity	SAR 1,115	SAR 800	{ ( SAR 1,115 - SAR 800 ) / SAR 800 } *100	39.38

* figures are rounded off to two decimal places.