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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