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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