BE18-Schelhammer Corporation reported the oration reported the following amounts

Question

BE18-Schelhammer Corporation reported the oration reported the following amounts in 2016, 2017, and Identify and 2018. financial sta (LO 1, 2) 2016 $200,000 150,000 500,000 2017 2018 Current assets Current liabilities Total assets $210,000 $240,000 168,000 600,000 184,000 620,000 Instructions Identify and describe the three tools of financial statement analysis. (b) Perform each (a) of the three types of analysis on Schellhammer's current assets. r3isine the following data from the comparative balance sheet of Goody Company, Prepa

Explanation / Answer

(a) The three tools of financial statement analysis are horizontal analysis, vertical analysis, and ratio analysis. Horizontal analysis evaluates a series of financial statement data over a period of time.
Vertical analysis evaluates financial statement data by expressing each item in a financial statement as a percent of a base amount.
Ratio analysis evaluate financial statement data by comparing each other.

(b)

2016 2017 2018 HorizontalAnalysis Current assets $200,000/ $200,000 = 100% $210,000/ $200,000 = 105% $240,000/ $200,000 = 120% Vertical Analysis Current assets $200,000/ $500,000 = 40.00% $210,000/ $600,000 = 35.00% $240,000/ $620,000 = 38.71% Ratio Analysis Current Ratio $200,000/ $150,000 = 1.33 $210,000/ $168,000 = 1.25 $240,000/ $184,000 = 1.30

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