Question

E15-17 Performing vertical analysis of a balance sheet Learning Objective 3 2016 Current Assets: 15.7% Tri Designs, Inc. has the following data: 2015 TRI DESIGNS, INC. Comparative Balance Sheet December 31, 2016 and 2015 2016 Assets Total Current Assets $ 54,950 Property, Plant, and Equipment, Net 250,250 Other Assets 44,800 Total Assets $ 350,000 $ 72,250 158,950 57,800 $289,000 Liabilities Total Current Liabilities Long-term Debt Total Liabilities $ 49,700 118,300 168,000 47,685 196,520 244.205 Stockholders' Equity Total Stockholders' Equity Total Liabilities and Stockholders' Equity 182,000 S350,000 44,795 $289,000 Copyright © 2016 Pearson Education, Inc. Perform a vertical analysis of Tri Designs's balance sheet for each year.

Answer 1

Tri Designs Inc.
Balance Sheet
December 31,2016 and 2015
Horizontal Analysis
	2016	Percentage	2015	Percentage
Assets
Total Current Assets	$54,950	15.70%	$72,250	25.00%
Property, Plant and Equipment, Net	$2,50,250	71.50%	$1,58,950	55.00%
Other Assets	$44,800	12.80%	$57,800	20.00%
Total Assets	$3,50,000	100.00%	$2,89,000	100.00%
Liabilities
Total Current Liabilities	$49,700	14.20%	$47,685	16.50%
Long-Term Debt	$1,18,300	33.80%	$1,96,520	68.00%
Total Liabilities	$1,68,000	48.00%	$2,44,205	84.50%
Stockholder's Equity
Total Stockholder's Equity	$1,82,000	52.00%	$44,795	15.50%
Total Liabilities and Stockholders equity	$3,50,000	100.00%	$2,89,000	100.00%
Note:The base for all the figures in case of vertical analysis is Total Assets for Assets and Total Liabilities and Stockholders equity
for Liabilities and Stockholders equity
MCCORMICK DESIGNS INC.
Comparative Income Statement
Years ended Dec 31,2016 and 2015
Horizontal Analysis
			Increase/(Decrease) in 2016
	2016	2015	Amount	Percentage
Net Sales Revenue	$4,31,250	$3,73,000	$58,250	15.6%
Expenses:
Cost of goods sold	$2,02,000	$1,89,000	$13,000	6.9%
Selling and administrative expenses	$1,00,050	$92,550	$7,500	8.1%
Other expenses	$8,000	$2,150	$5,850	272.1%
Total expenses	$3,10,050	$2,83,700	$26,350	9.3%
Net Income	$1,21,200	$89,300	$31,900	35.7%
Net Income increases at a higher rate because the expenses increases at a very lower rate which increases the Net Income