# Horizontal and Vertical Analysis of Income Statement Data

### Question Description

QUESTION #2

Here are the comparative income statements of Oriole Corporation.

ORIOLE CORPORATION Comparative Income Statement For the Years Ended December 31 | ||||
---|---|---|---|---|

2022 | 2021 | |||

Net sales | $640,400 | $584,700 | ||

Cost of goods sold | 463,600 | 439,100 | ||

Gross Profit | 176,800 | 145,600 | ||

Operating expenses | 79,100 | 48,700 | ||

Net income | $ 97,700 | $ 96,900 |

(a)

Prepare a horizontal analysis of the income statement data for Oriole Corporation, using 2021 as a base. *(If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)*

ORIOLE CORPORATION Comparative Income Statement choose the accounting period For the Years Ended December 31For the Month Ended December 31December 31 | ||||||||
---|---|---|---|---|---|---|---|---|

Increase or (Decrease) During 2022 | ||||||||

2022 | 2021 | Amount | Percentage | |||||

Net sales | $640,400 | $584,700 | $enter a dollar amount | enter percentages rounded to 1 decimal place | % | |||

Cost of goods sold | 463,600 | 439,100 | enter a dollar amount | enter percentages rounded to 1 decimal place | % | |||

Gross Profit | 176,800 | 145,600 | enter a dollar amount | enter percentages rounded to 1 decimal place | % | |||

Operating expenses | 79,100 | 48,700 | enter a dollar amount | enter percentages rounded to 1 decimal place | % | |||

Net income | $ 97,700 | $ 96,900 | $enter a dollar amount | enter percentages rounded to 1 decimal place | % |

(b)

Prepare a vertical analysis of the income statement data for Oriole Corporation for both years. *(Round percentages to 1 decimal place, e.g. 12.1%.)*

ORIOLE CORPORATION Condensed Income Statements choose the accounting period For the Years Ended December 31For the Month Ended December 31December 31 | |||||||||
---|---|---|---|---|---|---|---|---|---|

2022 | 2021 | ||||||||

$ | Percent | $ | Percent | ||||||

Net sales | $640,400 | enter percentages rounded to 1 decimal place | % | $584,700 | enter percentages rounded to 1 decimal place | % | |||

Cost of goods sold | 463,600 | enter percentages rounded to 1 decimal place | % | 439,100 | enter percentages rounded to 1 decimal place | % | |||

Gross Profit | 176,800 | enter percentages rounded to 1 decimal place | % | 145,600 | enter percentages rounded to 1 decimal place | % | |||

Operating expenses | 79,100 | enter percentages rounded to 1 decimal place | % | 48,700 | enter percentages rounded to 1 decimal place | % | |||

Net income | $ 97,700 | enter percentages rounded to 1 decimal place | % | $ 96,900 | enter percentages rounded to 1 decimal place | % |

done

13 hours ago

QUESTION #3

Prepare a vertical analysis of the income statement data for Oriole Corporation for both years. *(Round percentages to 1 decimal place, e.g. 12.1%.)*

Target Corporation | Wal-Mart Stores, Inc. | ||||||
---|---|---|---|---|---|---|---|

Income Statement Data for Year | |||||||

Net sales | $66,100 | $411,000 | |||||

Cost of goods sold | 44,000 | 302,000 | |||||

Selling and administrative expenses | 15,400 | 81,000 | |||||

Interest expense | 660 | 2,100 | |||||

Other income (expense) | (70 | ) | (420 | ) | |||

Income tax expense | 1,400 | 7,300 | |||||

Net income | $ 4,570 | $ 18,180 | |||||

Balance Sheet Data (End of Year) | |||||||

Current assets | $17,000 | $49,000 | |||||

Noncurrent assets | 26,800 | 120,000 | |||||

Total assets | $43,800 | $169,000 | |||||

Current liabilities | $12,000 | $54,000 | |||||

Long-term debt | 17,600 | 45,000 | |||||

Total stockholders’ equity | 14,200 | 70,000 | |||||

Total liabilities and stockholders’ equity | $43,800 | $169,000 | |||||

Beginning-of-Year Balances | |||||||

Total assets | $43,000 | $162,000 | |||||

Total stockholders’ equity | 14,400 | 66,000 | |||||

Current liabilities | 10,600 | 57,000 | |||||

Total liabilities | 28,600 | 96,000 | |||||

Other Data | |||||||

Average net accounts receivable | $7,900 | $4,200 | |||||

Average inventory | 7,200 | 33,700 | |||||

Net cash provided by operating activities | 5,800 | 26,200 | |||||

Capital expenditures | 1,700 | 12,400 | |||||

Dividends | 460 | 3,600 |

For each company, compute the following ratios. *(Round current ratio answers to 2 decimal places, e.g. 15.50, debt to assets ratio and free cash flow answers to 0 decimal places, e.g. 5,275 and all answers to 1 decimal place, e.g. 1.8 or 1.83%.)*

Ratio | Target | Wal-Mart | ||||||
---|---|---|---|---|---|---|---|---|

(1) | Current ratio | enter the current ratio | :1 | enter the current ratio | :1 | |||

(2) | Accounts receivable turnover | enter accounts receivable turnover in times | times | enter accounts receivable turnover in times | times | |||

(3) | Average collection period | enter average collection period in days | days | enter average collection period in days | days | |||

(4) | Inventory turnover | enter inventory turnover in times | times | enter inventory turnover in times | times | |||

(5) | Days in inventory | enter days in inventory ratio | days | enter days in inventory ratio | days | |||

(6) | Profit margin | enter percentages | % | enter percentages | % | |||

(7) | Asset turnover | enter asset turnover in times | times | enter asset turnover in times | times | |||

(8) | Return on assets | enter percentages | % | enter percentages | % | |||

(9) | Return on common stockholders’ equity | enter percentages | % | enter percentages | % | |||

(10) | Debt to assets ratio | enter percentages | % | enter percentages | % | |||

(11) | Times interest earned | enter times interest earned | times | enter times interest earned | times | |||

(12) | Free cash flow | $enter a dollar amount | $enter a dollar amount |

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