ANSWER A
HORIZONTAL ANALYSIS TAKING 2019 AS A BASE YEAR
FORMULA USED IN HORIZONTAL ANAYSIS= COMPARTIVE YEAR-BASE YEAR/BASE YEAR*100%
2020 | 2019 | %CHANGE | |
CURRENT ASSETS | |||
CASH | 306600 | 315800 | 2.91% |
ACCOUNT RECEVIABLE | 221100 | 186700 | 18.43% |
INVENTORY | 448800 | 409100 | 9.70% |
SHORT TERM INVESTMENT | 130200 | 110300 | 18.04% |
TOTAL CURRENT ASSET | 1106700 | 1021900 | 8.30% |
OTHER ASSETS | 115200 | 253500 | 54.56% |
TOTAL ASSETS | 1221900 | 1275400 | 4.20% |
CURRENT LIABILITIES | 183900 | 219900 | 16.37% |
LONG TERM DEBTS | 30400 | 65500 | 53.59% |
TOTAL LIABILITIES | 214300 | 285400 | 24.91% |
SHAREHOLDERS' EQUITY | 1007600 | 990000 | 1.78% |
TOTAL LIABILITIES AND EQUITY | 1221900 | 1275400 | 4.20% |
ANSWER B
VERTICAL ANALYSIS
2020 | % | |
SALES | $711000 | 100% |
COST OF SALES | $319950 | 45% |
GROSS PROFIT | $391050 | 55% |
OPERATING EXPENSE | ||
ADVERTISING EXPENSE | $7000 | 0.99% |
BANK CHARGE EXPENSE | $6700 | 0.94% |
COMMUNICATION EXPENSE | $7300 | 1.03% |
DEPRECIATION EXPENSE | $8000 | 1.13% |
PROFESSIONAL FEE EXPENSE | $4400 | 0.62% |
RENT EXPENSE | $6600 | 0.93% |
REPAIRS AND MAINTENANCE EXPENSE | $7100 | 0.99% |
SALARIES AND WAGES EXPENSE | $46800 | 6.58% |
TRANSPORTATION EXPENSE | $5000 | 0.70% |
UTILITIES EXPENSE | $5100 | 0.72% |
OPERATING EXPENSE | $104000 | 14.63% |
NET INCOME | $287050 | 40.37% |
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