Please give me a complete answer. Required Prepare a vertical analysis of both t
ID: 2473029 • Letter: P
Question
Please give me a complete answer.
Required Prepare a vertical analysis of both the balance sheets and income statements for 2015 and 2014 (Percentages may not add exactly due to rounding. Round your answers to 2 decimal places. (i.e., 2345 should be entered as 23.45).) REVNIK COMPANY Vertical Analysis of Balance Sh eet As of December 31 2015 2014 Percentage of Amount Amount Amount Percentage of Total Total Assets Current assets Cash Marketable securities Accounts receivable (net) Inventories Prepaid items $16,100 20,300 54,900 136,400 26.300 254,000 27,200 271,200 30,700 329,100 $ 583,100 3.00% $ 12.200 8,000 47,300 144,400 10,400 222,300 21,100 256,300 25,000 02,400 $ 524,700 Total current assets Investments Plant (net) Land Total long-term assets Total assets Liabilities Current liabilities Notes payable Accounts payable Salaries payable $15,500 113,000 20,900 49,400 $5,400 98,400 14,700 118,500 Total current liabilities Non current liabilities Bonds payable Other revenues 98,900 30,300 129,200 278,600 98,900 26,500 125,400 243,900 Total noncurrent liabilities Total liabilities Stockholders' equity Preferred stock. (par value $10.4% cumulative 62,000 62,000 180,500 304,500 $ 583,100 62,000 62.000 156,800 280,800 % $ 524.700 non-participating: 6,200 shares authorized andissued) Common stock (No par, 50,000 shares authorized 10,000 shares issued) Retained earnings Total stockholders' equity Total liabilities and stockholders' equityExplanation / Answer
Vertical Analysis of the Income Statement
The most common use of vertical analysis in an income statement is to show the various expense line items as a percentage of sales, though it can also be used to show the percentage of different revenue line items that make up total sales.
2015
2016
Amount
% of Total
Amount
% of Total
Revenue
sales
230600
96.36
210900
97.19
other revenue
8700
3.64
6100
2.81
Total revenue
239300
100
217000
100
Expenses
cost of good sold
118600
49.56
101100
46.59
Selling general and administrative
53800
22.48
48800
22.49
Interst expenses
6700
2.8
5900
2.72
Income tax expenses
21500
8.98
20500
9.44
Total expenses
200600
83.83
176300
81.24
NET INCOME
38700
16.17
40700
18.76
Vertical Analysis of the Balance Sheet
The central issue when creating a vertical analysis of a balance sheet is what to use as the denominator in the percentage calculation. The usual denominator is the asset total, but one can also use the total of all liabilities when calculating all liability line item percentages, and the total of all equity accounts when calculating all equity line item percentages.
2015
2016
Amount
% of Total
Amount
% of Total
Asset
Current asset
$16,100
2.76
$12,200
2.33
Marketable security
20,300
3.48
8,000
1.52
Accounts receivable
54,900
9.42
47,300
9.01
iInventories
136,400
23.39
144,400
27.52
Prepaid item
26,300
4.51
10,400
1.98
Total current asset
254,000
43.56
222,300
42.37
Investment
27,200
4.66
21,100
4.02
Plants
271,200
46.51
256,300
48.85
Land
30,700
5.26
25,000
4.76
Total long term asset
583,100
100
524,700
100
Liabilities
Current liabilities
Notes payable
15500
2.66
5400
1.03
Accounts payable
113000
19.4
98400
18.75
Salaries payable
20900
3.58
14700
2.8
Total current liabilities
149400
25.62
118500
22.58
Noncurrent liabilities
Bond payable
98900
16.96
98900
18.85
other revenue
30300
5.2
26500
5.05
Total noncurrent liabilities
129200
22.16
125400
23.9
Total liabilities
278600
47.8
243900
46.48
Share holder equity
Preferred stock
62000
10.63
62000
11.82
common stock
62000
10.63
62000
11.82
Retained earning
180500
30.96
156800
29.88
Total shareholder equity
304500
52.22
280800
53.52
Total liabilities and stock equity
583100
100
524700
100
2015
2016
Amount
% of Total
Amount
% of Total
Revenue
sales
230600
96.36
210900
97.19
other revenue
8700
3.64
6100
2.81
Total revenue
239300
100
217000
100
Expenses
cost of good sold
118600
49.56
101100
46.59
Selling general and administrative
53800
22.48
48800
22.49
Interst expenses
6700
2.8
5900
2.72
Income tax expenses
21500
8.98
20500
9.44
Total expenses
200600
83.83
176300
81.24
NET INCOME
38700
16.17
40700
18.76