Question

In this module, you will complete and submit your final project. First, complete the horizontal, vertical, and ratio analysis on the Module 06 tab in the Course Project Template workbook. I am needing help finding the horizontal, veritical and ration analysis for the tootisie roll inc for 2017 and 2018. I dont need the table filled in at all, I am just trying to figure out how to complete the analysis. YEar 1 is 2018 year 2 is 2017 and year 3 is 2016

Tootsie Roll Industries Inc. Vertical Analysis Year 1 Vertical Analysis Year 2 Horizontal Analysis Year 3 to 1 Income Statement Total Revenue Product Cost of Goods Sold Rental and Royalty Cost Total Gross Margin Selling, Marketing and Administrative Expenses Earnings from Operations Income Taxes Net Earnings Year 1 518,920 329,880 8671 188,173 117,691 70,482 16,401 56,805 Year 2 519,289 325,924 972 192,393 120,977 71,416 3,907 80,654 Year 3 521,100 320,290 1,019 199,791 107,377 92,414 30,593 67,319 Vertical Analysis Year 1 Vertical Analysis Year 2 Horizontal Analysis Year 3 to 1 Year 2 Balance Sheet Cash and Cash Equivalents Investments Accounts Receivable Trade Inventory (Add: FG and WIP + RM & supplies lines) Total Current Assets Net Property, Plant and Equipment Goodwill Trademarks Total Assets Accounts Payable Accrued Liabilities Total Current Liabilities Total Noncurrent Liabilities Total liabilities (Add total current liab + total noncurrent) Common Stock Class B Common Stock Retained Earnings Treasury Stock Total Equity Total liabilities and Shareholders Equity Year 1 110,899 35,714 49,777 51,694 304,046 186,101 73,237 175,024 947,361 11,817 42,849 61,391 135,473 196,864 26,767 17,767 33,767 -1,992 750,622 947,361 96,314 41,606 47,354 54,827 270,920 178,972 73,237 175,024 930,946 11,928 45,157 63,788) 133,354 197,142 26,361 17,285 57,225 -1,992 733,804 930,946 Year 3 119,145 67,513 42,964 57,531 299,300 180,905 73,237 175,024 920,101 10,320 46,300 63,561 145,002 208,563 26,181 16,820 43,833 -1,992 711,538 920,101

Answer 1

For completing a vertical analysis of two years you have to consider the gross sale as 100% and the other expenses will be calculated with regards to the gross sale. For example, in the year 2018 total revenue of 518,920 is 100% and COGS will be (329,880/518,290)*100%. All the line items will be calculated as a percentage to gross revenue. In the balance sheet, shareholder equity will be 100% and all the other line items will be calculated as a percentage to shareholder equity. In the horizontal analysis, the figures for 2016 will be 100% and changes will be reflected by percentage to 2016