BE18-2 (b) Drew Carey Corporation reported the following amounts in 2011, 2012,

Question

BE18-2 (b)
Drew Carey Corporation reported the following amounts in 2011, 2012, and 2013.

2011 2012 2013
Current assets $200,000 $230,000 $240,000
Current liabilities 160,000 168,000 184,000
Total assets 500,000 600,000 620,000

Instructions

Perform each of the three types of analysis on Drew Carey's current assets. (Round answers for horizontal and vertical analysis to 0 decimal places, e.g. 125. Round other answers to 2 decimal places, e.g. 10.50.)

2011 2012 2013
Horizontal Analysis
Current assets % % %

Vertical Analysis
Current assets % % %

Ratio Analysis
Current ratio

Explanation / Answer

Your total assets are always 100%, everything else is compared to total assets so the %s have to be less than 100%. Vertical analysis. 2007 current asset = 200,000, total assets = 500,000. Ratio of current assets to total assets, 200,000/500,000 = 40%. For liabilities you need total liabilites as the divisor. The amount of which is not in your question. For horizontal analysis 2008. 230,000-200,000(2007) = 30,000. 30,000/200,000 = 15% increase.

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