Segment Analysis McHale Company does business in two customer segments, Retail a
ID: 2392074 • Letter: S
Question
Segment Analysis McHale Company does business in two customer segments, Retail and Wholesale. The following annual revenue information was determined from the accounting system's invoice information: 20Y5 20Y4 Retail $219,600 $244,000 Wholesale 179,400 156,000 Total revenue $399,000 $400,000 Prepare a horizontal analysis of the segments. Round percentages to one decimal place. Enter negative values as negative numbers. McHale Company Horizontal Analysis For the Years 20Y4 and 20Y5 20Y5 20Y4 Difference - Amount Difference - Percent Retail $219,600 $244,000 $ % Wholesale 179,400 156,000 % Total revenue $399,000 $400,000 $ % Prepare a vertical analysis of the segments. If required, round percentages to one decimal place. McHale Company Vertical Analysis For the Years 20Y4 and 20Y5 20Y5 Amount 20Y5 Percent 20Y4 Amount 20Y4 Percent Retail $219,600 % $244,000 % Wholesale 179,400 % 156,000 % Total revenue $399,000 % $400,000 % Submit AnswerTry Another Version
Explanation / Answer
McHale Company
Horizontal analysis
For the years 2004 and 2005
Working note:
(i) Increase/Decrease = Amount of item in current year - Amount of item in base year
Decrease in retail = 219,600 - 244,000
= - $24,400
Increase in wholesale = 179,400 - 156,000
= $23,400
Decrease in total = 399,000 - 400,000
= - $1,000
(ii) Percentage change = (Increase or decrease/Amount of item in previous year) x 100
% Decrease in retail = (-24,400/244,000) x 100
= -10%
% Increase in wholesale = (23,400/156,000) x 100
= 15%
% Decrease in total = (-1,000/400,000) x 100
= -0.25%
McHale Company
Vertical Analysis
For the years 2004 and 2005
Working notes:
Calculation of % in 2005
Retail % = (219,600/399,000) x 100
= 55%
Wholesale % = (179,400/399,000) x 100
= 45%
Calculation of % in 2004
Retail % = (244,000/400,000) x 100
= 61%
Wholesale % = (156,000/400,000) x 100
= 39%
Segment 2005 2004 Increase/Decrease ($) % Retail 219,600 244,000 - 24,400 - 10% Wholesale 179,400 156,000 23,400 15% Total 399,000 400,000 - 1,000 - 0.25%