2012/2011 Current assets 440/280 Plant assets 675/520 Total Assets 1115/800 Curr

Question

2012/2011
Current assets 440/280
Plant assets 675/520
Total Assets 1115/800
Current Liabilities 280/120
Long term debt 250/160
Common stock 325/320
Retained earnings 260/200
Total liabilities and stock holders equity 1115/800

Using horizontal analysis what is the increase/decrease % for each year?


Using Vertical analysis what is the 2011 % given the 2012 amounts above and 2012% below?
Current assets 39.5%
Plant assets 60.5
Total Assets 100
Current Liabilities 25.1
Long term debt 22.4
Common stock 29.2
Retained earnings 23.3
Total liabilities and stock holders equity 100

Thanks!!

Explanation / Answer

Horizontal analysis

Current asset = (440 - 280)/280 = Increase 57.1%

Plant asset = (675 -520)/520 = Increase 29.8%

Total assets = (1115-800)/800 = Increase 39.4%

Current Liability = (280 - 120)/120 = Increase 133.3%

Long term debt = (250 - 160)/160= Increase 56.3%

Common stock = (325-320)/320 x 10 = Increase 1.6%

Retained earning = (260 - 200)/200 = Increase 30%

Total liabilities and stock holders equity = (1115-800)/800 0 = Increase 39.4%

Vertical analysis

Current assets = 280/800 =35.0%

Plant assets = 520/800 = 65.0%

Total assets = 100%

Current Liabilities = 120/800 = 15.0%

Long term debt = 160/800 =20.0%

Common stock = 320/800 =40.0%

Retained earning = 200/800 = 25.0%

Total liabilities and stock holders equity = 100.0%

Hope this helps!

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