The comparative condense balance sheets of Able Corporation are presented below.
ID: 2461173 • Letter: T
Question
The comparative condense balance sheets of Able Corporation are presented below.
ABLE CORPORTATION
Comparative Condensed Balance Sheets
December 31
2017 2016
Assets
Current assets $ 72,000 $80,000
Property, plant, and equipment (net) 95,400 90,000
Intangibles 33,600 40,000
Total Assets $201,000 $210,000
Liabilities and stockholder’s equity
Current liabilities $ 40,320 $48,000
Long-term liabilities 142,500 150,000
Stockholders’ equity 18,180 12,000
Total liabilities and stockholders’ equity $201,000 $210,000
Instructions
Prepare a horizontal analysis of the balance sheet data for Able Corporation using 2016 as a base.
Prepare a vertical analysis of the balance sheet data for Able Corporation in columnar form for 2017.
Explanation / Answer
Solution :
Horisontal Analysis
2,017
2,016
Change
% change
Assets
Current assets
72,000
80,000
- 8,000**
-10.00%***
Property, plant, and equipment (net)
95,400
90,000
5,400
6.00%
Intangibles
33,600
40,000
- 6,400
-16.00%
Total Assets
201,000
210,000
- 9,000
-4.29%
Liabilities and stockholder’s equity
Current liabilities
40,320
48,000
- 7,680
-16.00%
Long-term liabilities
142,500
150,000
- 7,500
-5.00%
Stockholders’ equity
18,180
12,000
6,180
51.50%
Total liabilities and stockholders’ equity
201,000
210,000
- 9,000
-4.29%
**72000-80000=-8000
***-8000/8000=-10%
Vertical analysis
2017
%
Assets
Current assets
72000
35.82%****
Property, plant, and equipment (net)
95400
47.46%
Intangibles
33600
16.72%
Total Assets
201000
100.00%
Liabilities and stockholder’s equity
Current liabilities
40320
20.06%
Long-term liabilities
142500
70.90%
Stockholders’ equity
18180
9.04%
Total liabilities and stockholders’ equity
201000
100.00%
Taking total of asset/liability side as base i.e 100%
****72000/201000=35.82%
Horisontal Analysis
2,017
2,016
Change
% change
Assets
Current assets
72,000
80,000
- 8,000**
-10.00%***
Property, plant, and equipment (net)
95,400
90,000
5,400
6.00%
Intangibles
33,600
40,000
- 6,400
-16.00%
Total Assets
201,000
210,000
- 9,000
-4.29%
Liabilities and stockholder’s equity
Current liabilities
40,320
48,000
- 7,680
-16.00%
Long-term liabilities
142,500
150,000
- 7,500
-5.00%
Stockholders’ equity
18,180
12,000
6,180
51.50%
Total liabilities and stockholders’ equity
201,000
210,000
- 9,000
-4.29%