Question

Problem 4 J.A. CO. does business in two customer segments. Retail and Wholesale. The current year revenue information was determined from the accounting system: batt Retail Wholesome Total revenues 2018 240,000 265,000 505,000 2019 210,000 310,000 520,000 $ N Instructions: 1. Prepare horizontal and vertical analyses of the segments.

Answer 1

J.A. Company
Horizontal Analysis
For the year 2018 and 2019
	2019	2018	Difference- Amount	Difference - %
Retail	$210,000	$240,000	($30,000)	-12.5%
Wholesome	$310,000	$265,000	$45,000	17.0%
Total revenue	$520,000	$505,000	$15,000	3.0%

Explanation:

Retail Difference % = ($210,000 - $240,000)/$240,000 = -$ 30,000/$240,000 =-0.125 or -12.5 %

Wholesome Difference % = ($310,000 - $265,000)/$265,000 = $ 45,000/$265,000 = 0.169811 or 17.0 %

Total revenue Difference % = ($520,000 - $55,000)/$505,000 = $ 15,000/$505,000 = 0.029703 or 3.0 %

J.A. Company
Vertical Analysis
For the year 2018 and 2019
	2019 Amount	2019 Percent	2018 Amount	2018 Percent
Retail	$210,000	40.4%	$240,000	47.5%
Wholesome	$310,000	59.6%	$265,000	52.5%
Total revenue	$520,000	100%	$505,000	100%

Explanation:

Retail 2019 % = $210,000/$520,000 = 0.403846 or 40.4 %

Wholesome 2019 % = $310,000/$520,000 = 0.596154 or 59.6 %

Retail 2018 % = $240,000/$505,000 = 0.475248 or 47.5 %

Wholesome 2018 % = $265,000/$505,000 = 0.524752 or 52.5 %