Question

Need to compute horizontal and vertical analysis for information below

Cloud 9, Inc. Trial Balance 31-Oct-22 31-Oct-21 Debit Credit Debit Credit Credit $ 61 13,446,154 70,485,625 6,123,884 64,867,910 $ 704,856 648,679 55,100,000 13,419,231 2,857,692 9,265,385 103,803,846 57,900,000 13,805,769 3,584,615 6,446,154 97,576,923 39,761,538 35,207,692 3,723,007 3,851,923 9,557,692 8,410,849 Cash and cash equivalents Accounts receivable Allowance for doubtful accounts Inventory Investments (derivatives) Deferred income taxes (current) Prepaid expenses and other current assets Property, plant, and equipment Accumulated depreciation Identifiable intangible assets and goodwill Accumulated amortization Deferred income taxes and other assets (noncurrent) Current portion of long-term debt Notes payable Accounts payable Accrued liabilities Income taxes payable Long-term debt Deferred income taxes and other liabilities (noncurrent) Common stock at par value Capital stock in excess of par value Unearned stock compensation Accumulated other comprehensive income Beginning retained earnings Dividends Repurchases of common stock Revenue Cost of sales Selling and administrative Interest expense Other expense Income tax expense 2,115,385 21,376,923 14,986,457 25,803,846 2,211,539 23,661,538 4,915,384 111,538 19,415,385 300,125 34,823,077 22,561,538 24,150,000 3,726,923 17,119,106 4,330,769 107,692 16,484,615 253,846 5,011,538 480,769 4,746,154 122,857,692 98,150,473 3,866,838 4,627,381 3,299,423 2,939,393 277,338,461 269,442,308 169,346,154 79,092,308 1,438,461 453,846 9,511,538 555,260,542 163,003,846 78,246,154 1,773,077 757,692 9,238,462 $ 527,052,997 $ $555,260,542 $ 527,052,997

Answer 1

Horizontal analysis of Income Statement based on Variance analysis and determined var % based on current year and previous year movement .

Where as vertical analysis , we take revenue base as 100% and recalculate % of other head of accounts under Income statement take revenue as base .

Below - I have just calculate Horizontal and Vertical Income Statement + Balance Sheet number . No analysis of line by line . As question not asked for any depth analysis.

If you need , then please drop me message , i will provide in depth analysis - line by line wise

Please have a look below and ask me if you have any doubt  

	Horizontal Analysis
	Income Statement
	31st Oct 2022 $	31st Oct 2021 $	Var $	Var %
Revenue	27,73,38,461	26,94,42,308	78,96,153	3%
Less
Cost of sales	16,93,46,154	16,30,03,846	63,42,308	4%
Operating profit	10,79,92,307	10,64,38,462	15,53,845	1%
Less
Selling and Admin	7,90,92,308	7,82,46,154	8,46,154	1%
Other expenses	4,53,846	7,57,692	-3,03,846	-40%
EBIT	2,84,46,153	2,74,34,616	10,11,537	4%
Less
Interest Expense	14,38,461	17,73,077	-3,34,616	-19%
Profit before Tax	2,70,07,692	2,56,61,539	13,46,153	5%
Less
Income Tax Expenses	95,11,538	92,38,462	2,73,076	3%
Net Profit	1,74,96,154	1,64,23,077	10,73,077	7%

	Vertical Analysis
	Income Statement
	31st Oct 2022 $	% allocation on - Revenue as base -100%	31st Oct 2021 $	% allocation on - Revenue as base -100%
Revenue	27,73,38,461	100%	26,94,42,308	100%
Less
Cost of sales	16,93,46,154	61%	16,30,03,846	60%
Operating profit	10,79,92,307	39%	10,64,38,462	40%
Less
Selling and Admin	7,90,92,308	29%	7,82,46,154	29%
Other expenses	4,53,846	0%	7,57,692	0%
EBIT	2,84,46,153	10%	2,74,34,616	10%
Less
Interest Expense	14,38,461	1%	17,73,077	1%
Profit before Tax	2,70,07,692	10%	2,56,61,539	10%
Less
Income Tax Expenses	95,11,538	3%	92,38,462	3%
Net Profit	1,74,96,154	6%	1,64,23,077	6%

	Horizontal Analys
	Balance Sheet
	31st Oct 2022 $	31st Oct 2021 $	Var $	Var %
Cash and Cash Equivalent	1,34,46,154	61,23,884	73,22,270	120%
Account receivable (Net)	6,97,80,769	6,42,19,231	55,61,538	9%
Inventory	5,51,00,000	5,79,00,000	-28,00,000	-5%
Investment ( derivative)	1,34,19,231	1,38,05,769	-3,86,538	-3%
Deferred income Tax (Current)	28,57,692	35,84,615	-7,26,923	-20%
Prepaid Expesnes and other current assets	92,65,385	64,46,154	28,19,231	44%
Total Current Assets	16,38,69,231	15,20,79,653	1,17,89,578	8%
Property ,plant and Equipment (less Accumulated depreciation)	6,40,42,308	6,23,69,231	16,73,077	3%
Identified Intangible Assets + Goodwill	37,23,007	38,51,923	-1,28,916	-3%
Deferred income taxes & other assets ( Non current)	95,57,692	84,10,849	11,46,843	14%
Total Assets	24,11,92,238	22,67,11,656	1,44,80,582	6%
Liability + Equity
Current Liability
Current portion of long term loan	21,15,385	3,00,125	18,15,260	605%
Note payable	2,13,76,923	3,48,23,077	-1,34,46,154	-39%
account payable	1,49,86,457	2,25,61,538	-75,75,081	-34%
accrued liability	2,58,03,846	2,41,50,000	16,53,846	7%
Income tax payable	22,11,539	37,26,923	-15,15,384	-41%
Total Current Liability	6,64,94,150	8,55,61,663	-1,90,67,513	-22%
Long term debt	2,36,61,538	1,71,19,106	65,42,432	38%
Deferred income taxes & other assets ( Non current)	49,15,384	43,30,769	5,84,615	13%
Equity part			-	#DIV/0!
Common stock at par	1,11,538	1,07,692	3,846	4%
Capital in excess of par value	1,94,15,385	1,64,84,615	29,30,770	18%
Unearned stock compensation	-2,53,846	-4,80,769	2,26,923	-47%
Accumulated othercomprehensive income	-50,11,538	-47,46,154	-2,65,384	6%
Retained earnings	12,28,57,692	9,81,50,473	2,47,07,219	25%
Add - Current Year Profit	1,74,96,154	1,64,23,077	10,73,077	7%
Dividend	-38,66,838	-32,99,423	-5,67,415	17%
Repurchase of common stock	-46,27,381	-29,39,393	-16,87,988	57%
Total Shareholders Equity	14,61,21,166	11,97,00,118	2,64,21,048	22%
Total Long term Liability + Equity	17,46,98,088	14,11,49,993	3,35,48,095	24%
Total Liability+ Stock holders Equity	24,11,92,238	22,67,11,656	1,44,80,582	6%

	Vertical Analys
	Balance Sheet
	31st Oct 2022 $	% allocation on Total Asset basis	31st Oct 2021 $	% allocation on Total Asset basis
Cash and Cash Equivalent	1,34,46,154	6%	61,23,884	3%
Account receivable (Net)	6,97,80,769	29%	6,42,19,231	28%
Inventory	5,51,00,000	23%	5,79,00,000	26%
Investment ( derivative)	1,34,19,231	6%	1,38,05,769	6%
Deferred income Tax (Current)	28,57,692	1%	35,84,615	2%
Prepaid Expesnes and other current assets	92,65,385	4%	64,46,154	3%
Total Current Assets	16,38,69,231	68%	15,20,79,653	67%
				0%
Property ,plant and Equipment (less Accumulated depreciation)	6,40,42,308	27%	6,23,69,231	28%
Identified Intangible Assets + Goodwill	37,23,007	2%	38,51,923	2%
Deferred income taxes & other assets ( Non current)	95,57,692	4%	84,10,849	4%
Total Assets	24,11,92,238	100%	22,67,11,656	100%
Liability + Equity		% allocation on Total Liability+ Equity		% allocation on Total Liability+ Equity
Current Liability
Current portion of long term loan	21,15,385	1%	3,00,125	0%
Note payable	2,13,76,923	9%	3,48,23,077	15%
account payable	1,49,86,457	6%	2,25,61,538	10%
accrued liability	2,58,03,846	11%	2,41,50,000	11%
Income tax payable	22,11,539	1%	37,26,923	2%
Total Current Liability	6,64,94,150	28%	8,55,61,663	38%
Long term debt	2,36,61,538	10%	1,71,19,106	8%
Deferred income taxes & other assets ( Non current)	49,15,384	2%	43,30,769	2%
Equity part		0%		0%
Common stock at par	1,11,538	0%	1,07,692	0%
Capital in excess of par value	1,94,15,385	8%	1,64,84,615	7%
Unearned stock compensation	-2,53,846	0%	-4,80,769	0%
Accumulated othercomprehensive income	-50,11,538	-2%	-47,46,154	-2%
Retained earnings	12,28,57,692	51%	9,81,50,473	43%
Add - Current Year Profit	1,74,96,154	7%	1,64,23,077	7%
Dividend	-38,66,838	-2%	-32,99,423	-1%
Repurchase of common stock	-46,27,381	-2%	-29,39,393	-1%
Total Shareholders Equity	14,61,21,166	61%	11,97,00,118	53%
Total Long term Liability + Equity	17,46,98,088	72%	14,11,49,993	62%
Total Liability+ Stock holders Equity	24,11,92,238	100%	22,67,11,656	100%