Question

Income Statement BA233 - Accounting for Managers M4 Step 6 - Learning Activity Prepare a vertical analysis of East Valley Computer Company's income statements and balance sheets for 2016 through 2014. Prepare the vertical analysis in the area below each set of statements. East Valley Computer Company Income Statements For the Years 2016 through 2014 2016 2015 2014 Sales $      24,977 $      21,348 $      19,199 Cost of goods sold          15,266          14,985          14,026 Gross profit             9,711             6,363             5,173 Operating expenses Wages             4,300             4,300             4,300 Rent             1,400             1,000                600 Utilities                560                670                780 Income before taxes             3,451                393              (507) Income taxes             1,345                421                  26 Net income $        2,106 $            (28) $          (533) East Valley Computer Company Vertical Analysis of Income Statements For the Years 2016 through 2014 Balance Sheet BA233 - Accounting for Managers M4 Step 6 - Learning Activity East Valley Computer Company Balance Sheets As of December 31 for the Years 2016 through 2014 2016 2015 2014 Assets Current assets Cash $            498 $        1,396 $        2,934 Accounts receivable             2,677             1,844                946 Merchandise inventory             5,649             4,087             3,492 Total current assets             8,824             7,327             7,372 Plant & equipment Van             7,355             6,843             6,988 Total assets $      16,179 $      14,170 $      14,360 Liabilities Current liabilities Accounts payable $        2,983 $        1,947 $            831 Long-term liabilities Notes payable             6,988             7,121             7,399 Total liabilities             9,971             9,068             8,230 Stockholders' equity Common stock             3,500             3,500             3,500 Retained earnings             2,708             1,602             2,630 Total stockholders' equity             6,208             5,102             6,130 Total liabilities and stockholders' equity $      16,179 $      14,170 $      14,360 East Valley Computer Company Vertical Analysis of Balance Sheets As of December 31 for the Years 2016 through 2014

Answer 1

vertical analasyis of income statement of East Valley Computer Company

	2016$	%net sales	2015$	%net sales	2014$	%net sales
Sales	24977	100%	21348	100%	19199	100%
Cost of goods sold	15266	61.12%	14985	70.19%	14026	73.06%
gross profit	9711	38.88%	6363	29.81%	5173	26.94%
operating exp
wages	4300	17.22%	4300	20.14%	4300	22.4%
rent	1400	5.61%	1000	4.68%	600	3.13%
utilities	560	2.24%	670	3.14%	780	4.06%
income before tax	3451	13.82%	393	1.84%	(507)	(2.64%)
income taxes	1345	5.38%	421	1.97%	26	0.14%
net income	2106	8.43%	(28)	(0.13%)	(533)	(2.78%)

vertical analasyis of balance sheet of East Valley Computer Company

	2016$	%	2015$	%	2014$	%
ASSETS
current assets
cash	498	3.08%	1396	9.85%	2934	20.43%
accounts recivable	2677	16.55%	1844	13.01%	946	6.59%
Merchandise inventory	5649	34.92%	4087	28.84%	3492	24.32%
total current assets	8824	54.54%	7327	51.71%	7372	51.34%
plant & equipment
van	7355	45.46%	6843	48.29%	6988	48.66%
total assets	16179	100%	14170	100%	14360	100%
LIABILITIES
current liabilities
accounts payable	2983	18.44%	1947	13.74%	831	5.79%
Long-term liabilities
notes payable	6988	43.19%	7121	50.25%	7399	51.53%
total liabilities	9971	61.63%	9068	63.99%	8230	57.31%
stock-holders equity
common stock	3500	21.63%	3500	24.7%	3500	24.37%
retained earnings	2708	16.74%	1602	11.31%	2630	18.31%
total stock-holders equity	6208	38.37%	5102	36.01%	6130	42.69%
Total liabilities and stockholders' equity	16179	100%	14170	100%	14360	100%