Question

Vertical Analysis of Balance Sheet

Balance sheet data for Alvarez Company on December 31, the end of two recent fiscal years, follows:

Current Year Previous Year
Current assets $254,100 $139,700
Property, plant, and equipment 499,730 450,850
Intangible assets 93,170 44,450
Current liabilities 177,870 107,950
Long-term liabilities 330,330 266,700
Common stock 67,760 63,500
Retained earnings 271,040 196,850

Prepare a comparative balance sheet for both years, stating each asset as a percent of total assets and each liability and stockholders' equity item as a percent of the total liabilities and stockholders' equity. If required, round percentages to one decimal place.

Alvaraz Company
Comparative Balance Sheet
For the Years Ended December 31
Current year Amount Current year Percent Previous year Amount Previous year Percent
Current assets $254,100 % $139,700 %
Property, plant, and equipment 499,730 % 450,850 %
Intangible assets 93,170 % 44,450 %
Total assets $847,000 % $635,000 %
Current liabilities $177,870 % $107,950 %
Long-term liabilities 330,330 % 266,700 %
Common stock 67,760 % 63,500 %
Retained earnings 271,040 % 196,850 %
Total liabilities and stockholders' equity $847,000 % $635,000 %

Answer 1

Solution:

Vertical Analysis of Balance Sheet

Alvaraz Company Comparative Balance Sheet For the Years Ended December 31
	Current Year		Previous Year
	Amount	Percent	Amount	Percent
Assets
Current Assets	$254,100	30.00% (254100/847000*100)	$139,700	22.00% (139700/635000*100)
Property, plant, and equipment	$499,730	59.00% (499730 / 847000 * 100)	$450,850	71.00% (450850/635000*100)
Intangible assets	$93,170	11.00% (93170/847000*100)	$44,450	7.00% (44450/635000*100)
Total Assets	$847,000	100.00%	$635,000	100.00%
Liabilities and Stockholders' Equity
Current Liabilities	$177,870	21.00% (177870/847000*100)	$107,950	17.00%
Long term liabilities	$330,330	39.00% (330330/847000*100)	$266,700	42.00%
Common Stock	$67,760	8.00%	$63,500	10.00%
Retained Earnings	$271,040	32.00%	$196,850	31.00%
Total Liabilities and stockholders' equity	$847,000	100.00%	$635,000	100.00%

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