PLEASE COMPLETE SECTION (B) WHICH IS A HORIZONTAL AND VERTICAL ANALYSIS This is
ID: 2423679 • Letter: P
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PLEASE COMPLETE SECTION (B) WHICH IS A HORIZONTAL AND VERTICAL ANALYSIS
This is a comprehensive problem all contained on this spreadsheet tab. You are to prepare a cash flow statement, a vertical
PLEASE COMPLETE SECTION (B) WHICH IS A HORIZONTAL AND VERTICAL ANALYSIS
This is a comprehensive problem all contained on this spreadsheet tab. You are to prepare a cash flow statement, a vertical
analysis, a horizontal analysis, and some ratio calculations. Scroll down the spreadsheet to complete each part. Philadelphia Widget Corporation is in the process of preparing financial statements for the year ended 12/31/2015. They have completed the balance sheet and income statement as shown. Philadelphia Widget Corporation Income Statement For the year ended 12/31/2015 Revenue 1,235,000 Cost of Goods Sold 806,356 Gross Profit 428,644 Administrative Expenses: Salaries 212,450 Rent 82,500 Depreciation 24,800 Total Administrative Expense 319,750 Operating Profit 108,894 Gain on Sale of Equipment 4,500 Interest Expense (42,115) Net Income 71,279 Philadelphia Widget Corporation Balance Sheet As of 12/31/2015, 12/31/2014, and 12/31/2013 2015 2014 2013 Cash 119,411 89,564 105,644 Accounts Receivable 85,455 83,118 78,400 Inventory 41,600 48,560 62,600 Prepaid Expenses 14,500 18,100 24,000 Total Current Assets 260,966 239,342 270,644 Land 50,000 50,000 50,000 Buildings and Equipment 182,450 172,450 166,800 Accumulated Depreciation 78,900 103,550 62,600 109,850 54,580 112,220 Total Assets 414,516 399,192 432,864 Accounts Payable 62,525 51,480 45,200 Wages payable 4,500 4,500 1,500 Unearned Revenue 3,000 - - Current Portion of Long-Term Debt 50,000 50,000 50,000 Total Current Liabilities 120,025 105,980 96,700 Long-Term Debt 175,000 225,000 275,000 Common Stock, 3500 shares outstanding 35,000 35,000 35,000 Retained Earnings 84,491 33,212 26,164 Total Stockholders' Equity 119,491 68,212 61,164 Total Liabilities and Equity 414,516 399,192 432,864 B. Prepare a vertical analysis (1 year) of the income statement above and a horizontal analysis (2 years) of the balance sheet. Philadelphia Widget Corporation Vertical Analysis of Income Statement Philadelphia Widget Corporation Horizontal Analysis of Balance SheetExplanation / Answer
Vertical Analysis of Income Statement
Administrative expenses as a % of Revenue (319750/B)*100
B. Horizontal Analysis of Balance Sheet
Debt equity ratio (Long term debt/ Total Stock holder's equity)
*Total Stock holder's equity= common stock + retained earnings
Particulars Amount Revenue (A) 1235000 Cost of Goods Sold 806356 Gross Profit (B) 428644 Gross Profit as a % of Revenue (A/B) x 100 35 %Administrative expenses as a % of Revenue (319750/B)*100
26 % Operating Profit D=(B-C) 108894 Operating profit as a % of Revenue (D/B) x 100 9 % Net Income (E) 71279 Net Income as a % of Revenue (E/B) x 100 6 %Related Questions
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