Question

Requirement 1. Prepare a vertical analysis for McConnell for both its income statement and balance sheet. Begin by preparing a vertical analysis for McConnell for its income statement. (Round the percent of total amounts to one decimal place, X.X%.) McConnell Department Stores, Inc. Income Statement Year Ended December 31, 2018 Amount Percent of Total Net Sales Revenue $ % 783,000 526,176 Cost of Goods Sold % Gross Profit % 256,824 163,647 % Operating Expenses Operating Income % 93,177 4,698 Other Expenses % $ 88,479 Net Income %

Answer 1

Vertical Analysis of McConnell for its income statements McConnell Department stores Inc Income statement Year ended December 31, 2018 Amount Percent of Total Net sales Revenue $ 7,83,000 100% Cost of Goods sold 5,26,000 67.24 Gross Profit 2,56,824 32.8% Operating Expenses 1, 63, 647 20.9% Operating Income 93,177 11.94 other Expenses 4,698 0.6% Net Income $ 88,479 11.3% Companitive common - size income statement for Mill Designs Mill Designs, Inc. Common size Income statement Years ended December 31, 2018 and 2017 2018 2017 Net sales Revenue 10044 100% Expenses : Cost of Goods sold 47.8% 49.9% 23.32% 25.47% Selling and Admin Expenses other expenses 2.0 0.9% Total Expenses 73.1% Net Income 26.9% 23.7% 76.3%
Vertical Analysis - In vertical analysis, we do assume the net sales revenue as 100% and calculate other percentages with the help of that.. Suppose if 783000= 100% , then 526000= ? %

Comparitive Analysis - Here we do compare the values of two years by doing individual vertical analysis of different years.

Horizontal Analysis - In horizontal analysis, we will notice the increase Or decrease value between different periods and percentage increase or decrease.

Percentage change = amount of change/ base value(2017)