Question

use vertical analysis to cimpare profitability

1 1 FILE HOME INSERT PAGE LAYOUT Perform Vertical Analysis - Excel FORMULAS DATA REVIEW X VIEW Calibri - AA Sign in % Paste BIU M 10 points Alignment Number Conditional Format as Cell Formatting Table Styles Clipboard Cels Editing Font Skipped A1 f Lake Athletics sells two distinct product lines Apparel and Equipment A B 1 Lake Athletics sells two distinct product lines: Apparel and Equipment 2 The income statement for each product line appears below. D E F eBook 3 Point 6 ferences 4 LAKE ATHLETICS 5 Income Statement For the Year Ended December 31, 20X1 7 Apparel Equipment Amount Percent Amount Percent Net sales $3.150.000 $5.350.000 10 Cost of goods sold 1.400.000 2,720,000 11 Gross profit 1.750.000 2,830,000 12 Operating expenses 800.000 875.000 13 Operating income 950.000 1.955.000 14 Other income 20.000 10.000 15 Income before tax 970.000 1.965.000 16 Income tax expense 241.250 491.000 17 Net income $728.750 $1476250 18 19 Required: 20 1. Use appropriate Excel formulas to perform vertical analysis and complete the "Percent" columns for both product lines above. Express cach amount as a percentage of net sales. 22 Note: You should be absolute references in the dare of all formula 23 2. Use the Excel IF function and the completed wertial analysis above to answer each of the 24 questions below 21 ME Next

(all information shoukd be added as a formula)

Answer 1

Pleae find the attached solution:

Solution 1 LAKE ATHELETICS Income Statement For the Year Ended December 31, 20X1 Net Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Income Other Income Income Before Tax Income Tax Expense Net Income Apparel Amount ($) Percent 3,150,000 100.00% 1,400,000 44.44% 1,750,000 55.56% 800,000 25.40% 950,000 30.16% 20,000 0.63% 970,000 30.79% 241,250 7.66% 728,750 23.13% Equipment Amount ($) Percent 5,550,000 100.00% 2,720,000 49.01% 2,830,000 50.99% 875,000 15.77% 1,955,000 35.23% 10,000 0.18% 1,965,000 35.41% 491,000 8.85% 1,474,000 26.56% Excel Formula for Verticle Analysis and percentage of each head Cell of Individual head/cell of Net Sales*100 Solution 2 Equipment E10 Which product Line Has higher Gross Profit % Apparel Cell No C10 Formula = EQUALTO IF(C10>E10,C10,E10) Apparel 55.56% Equipment E16 Which product Line Has higher Net Income % Apparel Cell No C16 Formula = EQUALTO IF(C16>E16,C16,E16) Equipement 26.56%