Question

1. Prepare a vertical analysis on the income statement and Balance statement. (Please show

the formula & your calculations).

Balance Sheet

December 31, 20X7 & 20X6

Assets 20X7 20X6

Cash $ 15,000   17,000

Marketable securities 10,000 10,000

Accounts receivable (net) 20,000 22,000

Inventory 30,000 27,000

Prepaid expenses 8,000 9,000

Property, plant, and equipment 117,000 117,000

Total assets $200,000 202,000

Liabilities and Stockholders' Equity

Current liabilities $ 30,000 27,000

Long-term liabilities 61,000 56,000

Stockholders' equity 109,000 119,000

Total liabilities and stockholders' equity $200,000 202,000

Income Statement

For the Year Ended December 31, 20X7 & 20X6

Net sales $160,000 150,000

Cost of goods sold 120,000 118,000

Gross margin $ 40,000 32,000

Operating expenses

Selling and administrative expenses $ 16,000 23,000

Interest expense 8,000 7,750

Income taxes expense 4,000 28,000 250

Net income $ 12,000 1,000

thats the balance sheet and income statement

Answer 1

Vertical analysis