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1,292,000 1. Prepare a verticle analysis of Fantasy Football\'s 2018 and 2017 ba

ID: 2594776 • Letter: 1

Question

1,292,000

1. Prepare a verticle analysis of Fantasy Football's 2018 and 2017 balance sheets. Express each amount as a percentage of total assets for that year.

2. Prepare a horizontal analysis of Fantasy Football's 2018 balance sheet using 2017 as the base year.

Assets 2018 2017 Current Assets: Cash $208,000 $262,200 Accounts Receivable 856,000 999,400 Inventory 1,900,000 1,349,000 Supplies 124,000 87,400 Long-term Assets: Equipment 1,292,000

1,292,000

Less: Accumulated depreciation (380,000) (190,000) Total assets $4,000,000 $3,800,000 Liabilities and Stockholders' Equity Current Liabilities: Acounts Payable $168,000 $129,200 Interest Payable 0 3,800 Income Tax Payable 76,000 76,000 Long-term Liabilities: Notes Payable 760,000 760,000 Stockholders' Equity: Common Stock 786,600 786,600 Retained Earnings 2,209,400 2,044,400 Total Liabilities and Stockholders' Equity $4,000,000 $3,800,000

Explanation / Answer

1) vertical analysis of Fantasy Football's 2018 and 2017 balance sheets

    Amount

            %

      Amount

           %

Assets :

Current assets :

cash

$208,000

5.2

$262,200

6.9

accounts receivable

$856,000

21.4

$999,400

26.3

Inventory

$1,900,000

47.5

$1,349,000

35.3

Supplies

$124,000

3.1

$87,400

2.3

Long term assets :

Equipment

$1,292,000

32.3

$1,292,000

34

less: accumulated depreciation

($380,000)

-9.50%

($190,000)

-5.00%

Total assets

$4,000,000

100

$3,800,000

100

Liabilities and stockholders equity

current liabilities:

accounts payable

$168,000

4.2

$129,200

3.4

interest payable

$0

$3,800

0.1

income tax payable

$76,000

1.9

$76,000

2

Long term liabilities

   notes payable

$760,000

19

$760,000

20

Stock holders equity:

   common stock

$786,600

19.7

$786,600

20.7

   retained earnings

$2,209,400

55.2

$2,044,400

53.8

total liabilities and stockholders equity

$4,000,000

100

$3,800,000

100

2 ) horizontal analysis of Fantasy Football's 2018 balance sheet using 2017 as the base year.

2018

2017

increase/(decrease)

     % 2017 as base year

     Amount

Assets :

Current assets :

cash

$208,000

$262,200

$54,000

20.61

accounts receivable

$856,000

$999,400

$143,400

14.34

inventory

$1,900,000

$1,349,000

($551,000)

-40.86%

supplies

$124,000

$87,400

($36,600)

-41.87%

Long term assets :

Equipment

$1,292,000

$1,292,000

$0

0

less: accumulated depreciation

($380,000)

($190,000)

($190,000)

-100.00%

Total assets

$4,000,000

$3,800,000

($200,000)

-5.26%

Liabilities and stockholders equity

current liabilities:

accounts payable

$168,000

$129,200

($38,800)

-30.03%

interest payable

$0

$3,800

$3,800

100.00%

income tax payable

$76,000

$76,000

$0

0.00%

Long term liabilities

   notes payable

$760,000

$760,000

$0

0.00%

Stock holders equity:

   common stock

$786,600

$786,600

$0

0.00%

   retained earnings

$2,209,400

$2,044,400

($165,000)

-8.07%

total liabilities and stockholders equity

$4,000,000

$3,800,000

($200,000)

-5.26%

    Amount

            %

      Amount

           %

Assets :

Current assets :

cash

$208,000

5.2

$262,200

6.9

accounts receivable

$856,000

21.4

$999,400

26.3

Inventory

$1,900,000

47.5

$1,349,000

35.3

Supplies

$124,000

3.1

$87,400

2.3

Long term assets :

Equipment

$1,292,000

32.3

$1,292,000

34

less: accumulated depreciation

($380,000)

-9.50%

($190,000)

-5.00%

Total assets

$4,000,000

100

$3,800,000

100

Liabilities and stockholders equity

current liabilities:

accounts payable

$168,000

4.2

$129,200

3.4

interest payable

$0

$3,800

0.1

income tax payable

$76,000

1.9

$76,000

2

Long term liabilities

   notes payable

$760,000

19

$760,000

20

Stock holders equity:

   common stock

$786,600

19.7

$786,600

20.7

   retained earnings

$2,209,400

55.2

$2,044,400

53.8

total liabilities and stockholders equity

$4,000,000

100

$3,800,000

100