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1 HORIZONTAL ANALYSIS INSTRUCTIONS: Prepare a horizontal analysis of the income statement using 2018 as a...

1 HORIZONTAL ANALYSIS INSTRUCTIONS: Prepare a horizontal analysis of the income statement using 2018 as a base. Neiman Corp. Comparative Balance Sheet For the years ended December 31 2019 2018 Assets Current Assets 360 300 Plant Assets 640 500 Total Assets 1,000 800 Liabilities & Stockholders' Equity Current liabilities 150 120 Long-term debt 240 160 Common stock 350 320 Retained earnings 260 200 Total liabilities & stockholders' equity 1,000 800

2

VERTICAL ANALYSIS
INSTRUCTIONS: Prepare a vertical analysis of the income statement.
Neiman Corp.
Comparative Balance Sheet
For the years ended December 31
2019 2018
Assets
Current Assets                     360           300
Plant Assets                     640           500
Total Assets                  1,000           800
Liabilities & Stockholders' Equity
Current liabilities                     150           120
Long-term debt                     240           160
Common stock                     350           320
Retained earnings                     260           200
Total liabilities & stockholders' equity                  1,000           800

Solutions

Expert Solution

Ans. 1 Nelman Corp.
Comparative Balance Sheet
For the Years Ended December 31
2019 2018 Amount change Percentage change
Assets
Current assets $360 $300 $60 20.0%
Plant assets $640 $500 $140 28.0%
Total assets $1,000 $800 $200 25.0%
Liabilities and Stockholder's Equity
Current liabilities $150 $120 $30 25.0%
Long term debt $240 $160 $80 50.0%
Common stock $350 $320 $30 9.4%
Retained eanings $260 $200 $60 30.0%
Total Liabilities and stockholder's equity $1,000 $800 $200 25.0%
Change in amount = Particular amount of current year 2019 - Particular amount of previous year 2018
Change in percentage = Change in amount / particular amount of base (2018) or previous year * 100
Ans. 2 Nelman Corp.
Comparative Balance Sheet
For the Years Ended December 31
2019 % 2018 %
Assets
Current assets $360 36.00% $300 37.50%
Plant assets $640 64.00% $500 62.50%
Total assets $1,000 100.00% $800 100.00%
Liabilities and Stockholder's Equity
Current liabilities $150 15.00% $120 15.00%
Long term debt $240 24.00% $160 20.00%
Common stock $350 35.00% $320 40.00%
Retained eanings $260 26.00% $200 25.00%
Total Liabilities and stockholder's equity $1,000 100.00% $800 100.00%
*Calculations for Vertical Balance Sheet:
Amount is percentage from assets side =   Particular amount from assets side / Total assets * 100
Amount is percentage from liabilities side =   Particular amount from liability side / Total liabilities and owner's equity * 100

ekkarill92 answered 9 months ago
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