Activity #3: Financial Statement Analyses

2014 2013 1. Horizontal analysis of 2014 Me

Cash and Cash Equivalents 12,250 9.49% 10,470 9.25% a. Cash as 9.50% of total assets.
Receivables 9,065 7.02% 8,055 7.12% b. 17% increase in Prepaid Expens
Inventory 6,620 5.13% 5,300 4.68% c. 19% increase in Cash.
Prepaid Expenses 8,545 6.62% 10,600 9.37% d. All of the above
Total Curent Assets 36,480 28.28% 34,425 30.43% Answer : C
Other Assets 92,500 71.71% 78,685 69.56% 12,250-10,470
10470
Total Assets 128,980 100% 113,110 100%
Total current liabilities 36,150 28.02% 42,335 37.42%
Long-term Liabilities 23,990 18.59% 18,960 16.76% 2. Vertical analysis of 2014 Merda
Mercedes Aldana, Capital 68,840 53.37% 51,815 45.80% a. Cash as 9.50% of total assets.
Total Liabilities and Equity 128,980 100% 113,110 100% b. 17% increase in Prepaid Expens
c. 19% increase in Cash.
Sales 104,705 100% d. All of the above
Cost of Goods Sold 35,275 30.68% Answer: A
Gross Profit 69,430 66.31% 12,250
Selling Expenses 35,325 33.37% 128,980
Administrative Expenses 12,815 12.23%
Operating Income 21,290 20.33% 3. A common-size income statem
Interest Expense 1,050 1.00% a. Net income of 19%.
Net Income 20,240 19.33% b. Sales of 100%.
c. Cost of sales at 34%.
Horizontal % d. All of the above
17% Answer: D
12.53% Net Income
24.90% (20,240/104,705)100=
-19.38%
5.96% 4. A common-size balance sheet f
17.55% a. Current liabilities as 28% of tot
14.03% b. Owner’s capital is 53% of total
c. Receivables is 7% of total liabili
14.60% d. All of the above
26.52% Answer: D
32.85% A. (36,150/128,980)10
14.03%

5. Trend analysis will show which

a. 15% increase in Current Liabiliti
b. 33% increase in Owner’s Capita
c. 19% increase in Long Term Liab
d. All of the above
Answer: B
 (68,840-51,815/51,815

6. If current assets are ₱270,000 a

answer: 270,000
810,000

7. Comparing the amount of a ba

answer: horizontal analysis

8. A firm has liabilities of ₱30,000

answer: 30,000/120,000X100=2

9. A firm had owner’s capital of ₱

answer: 187,500-150,000
150,000

10. If long-term liabilities are ₱30

answer: 300,000
2,100,000

Abakada Trading Company

Statement of Comprehensive Inco
Horizontal Analysis
2014 2015 Amount %
Revenue 1,939,500 1,674,675 -264,825 -13.65%
Cost of Goods Sold 900,000 843,975 -56,025 -6.23%
Gross Profit 1,039,500 830,700 -208,800 -20.09%
Selling and General expenses 445,500 409,725 -35,775 -8.03%
Other expenses 37,575 30,825 -6,750 -17.96%
Net Income 556,425 390,150 -166,275 -29.88%

Ilang-Ilang Trading Co
Statement of Financia

2014 2015 Amount %

Current assets 192,375 265,500 73,125 38.01%
Property, plant and equipment 937,508 967,500 29,992 3.20%
Other assets 152,618 159,750 7,132 4.67%
Total assets 1,282,501 1,392,750 110,249 8.60%
Liabilities
Total Current liabilities 220,590 225,550 4,960 2.25%
Long-term debt 491,198 460,250 -30,948 -6.30%
Owner's Capital 570,713 706,950 136,237 23.87%
Total Liabilities and Equipment 1,282,501 1,392,750 110,249 73.53%
ntal analysis of 2014 Merdana’s balance sheet would report
9.50% of total assets.
crease in Prepaid Expenses.
rease in Cash.

12,250-10,470 x100 17%

analysis of 2014 Merdana’s balance sheet would report

9.50% of total assets.
crease in Prepaid Expenses.
rease in Cash.

X100 9.50%

mon-size income statement for Merdana would report (amounts rounded)

ome of 19%.

sales at 34%.

Sales Cost of Sales

Net Income 100% (32,275/104,705)100=30.82%
(20,240/104,705)100=19.33%

mon-size balance sheet for Merdana would report (amounts rounded)

liabilities as 28% of total assets.
s capital is 53% of total liabilities and equity
bles is 7% of total liabilities and equity

A. (36,150/128,980)100=28.03% B. (68,840/128,980)100=53.37% C. (9,065/104,705)100=7.03%

nalysis will show which of the following?

crease in Current Liabilities.
crease in Owner’s Capital.
rease in Long Term Liabilities
 (68,840-51,815/51,815)100 =32.86%

nt assets are ₱270,000 and total assets are ₱810,000, what percentage of total assets are current assets?
x100 33.33%

ring the amount of a balance sheet item in one year to the amount for the same item in a prior year is called
orizontal analysis

has liabilities of ₱30,000 and owner’s capital of ₱90,000. The percentage oftotal liabilities to total assets is
30,000/120,000X100=25%

had owner’s capital of ₱150,000 in 2013 and ₱187,500 in 2013. The increase in owner’s capital from 2013 to 2014 is
187,500-150,000 x 100 25.00% or 37,500

-term liabilities are ₱300,000 and total assets are ₱2,100,000, what percentage of total assets are long-term liabilities?
x100 14.28%

ada Trading Company

of Comprehensive Income
Vertical Analysis
2014 % 2015 %
Revenue 1,939,500 100 1,674,675 100
Cost of Goods Sold 900,000 46.40% 843,975 50.40%
Gross Profit 1,039,500 53.60% 830,700 49.60%
Selling and General expenses 445,500 22.97% 409,725 24.47%
Other expenses 37,575 1.94% 30,825 1.84%
Net Income 556,425 28.69% 390,150 23.30%

Ilang-Ilang Trading Company

Statement of Financial Position

2014 % 2015 %
Current assets 192,375 15.00% 265,500 19.06%
Property, plant and equipment 937,508 73.10% 967,500 69.47%
Other assets 152,618 11.90% 159,750 11.47%
Total assets 1,282,501 100 1,392,750 100%
Liabilities
Total Current liabilities 220,590 17.20% 225,550 16.19%
Long-term debt 491,198 38.30% 460,250 33.05%
Owner's Capital 570,713 44.50% 706,950 50.76%
Total Liabilities and Equipment 1,282,501 100 1,392,750 100