Analyzing Financial Statements Using Horizontal and Ratio Analyses
The comparative financial statements prepared at December 31, 2010, for Tiger Audio showed the following summarized data:
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| Increase (Decrease) 2010 over 2009 | |
2010 | 2009 | Amount | Percentage | |
Income Statement |
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Sales Revenue | $222,000 | $185,000 |
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Cost of Goods Sold | 127,650 | 111,000 |
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Gross Profit | 94,350 | 74,000 |
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Operating Expenses | 39,600 | 33,730 |
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Interest Expense | 4,000 | 3,270 |
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Income before Income Tax Expense | 50,750 | 37,000 |
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Income Tax Expense (30%) | 15,225 | 11,100 |
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Net Income | $ 35,525 | $ 25,900 |
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Balance Sheet |
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Cash | $ 40,000 | $ 38,000 |
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Accounts Receivable, Net | 18,500 | 16,000 |
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Inventory | 25,000 | 22,000 |
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Property and Equipment, Net | 127,000 | 119,000 |
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Total Assets | $210,500 | $195,000 |
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Accounts Payable | $ 27,000 | $ 25,000 |
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Income Tax Payable | 3,000 | 2,800 |
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Note Payable, Long-Term | 75,500 | 92,200 |
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Total Liabilities | 105,500 | 120,000 |
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Capital Stock (par $1) | 25,000 | 25,000 |
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Retained Earnings | 80,000 | 50,000 |
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Total Liabilities and Stockholders’ Equity | $210,500 | $195,000 |
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Required:
1.Complete the two final columns shown beside each item in Tiger Audio’s comparative financial statements. Round the percentages to one decimal place.
2.Does anything significant jump out at you from the year-over-year analyses?
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