CHAPTER 8 Analysis and interpretation of financial statements 359SOLUTION TO 8.1
a. Horizontal analysis
Review Ltd
Balance sheet as at 30 June
Change
2017 2016 $ %
CURRENT ASSETS
Cash and cash equivalents
Account receivable
Inventories
Prepayments
Other current assets$ 23 092
29 588
18 966
11 740
21 000$ 18 952
25 750
25 094
14 600
17 5304 140
3 838
(6 128
(2 860
3 470)
)21.84
14.90
(24.42
(19.59
19.79)
)Total current assets 104 386 101 926 2 460 2.41
NON-CURRENT ASSETS
Property, plant and equipment
Agricultural assets
Intangible assets87 174
53 748
32 97071 722
49 368
40 90415 452
4 380
(7 934)21.54
8.87
(19.40)
Total non-current assets 173 892 161 994 11 898 7.34
Total assets 278 278 263 920 14 358 5.44
CURRENT LIABILITIES
Account payable
Short-term borrowings
Current tax liabilities34 738
44 000
29 25027 156
56 000
25 0867 582
(12 000
4 164)27.92
(21.43
16.60)Total current liabilities 107 988 108 242 (254) (0.23)
NON-CURRENT LIABILITIES
Long-term borrowings
Deferred tax liabilities92 500
43 31678 000
49 74814 500
(6 432)18.59
(12.93)
Total non-current liabilities 135 816 127 748 8 068 6.32
Total liabilities 243 804 235 990 7 814 3.31
Net assets 34 474 27 930 6 544 23.43
EQUITY
Issued capital
Retained earnings21 000
13 47417 000
10 9304 000
2 54423.53
23.28
Total equity $ 34 474 $ 27 930 6 544 23.43b. Vertical analysis
Review Ltd
Balance sheet as at 30 June
2017 % to assets 2016 % to assets
CURRENT ASSETS
Cash and cash equivalents
Account receivable
Inventories
Prepayments
Other current assets$ 23 092
29 588
18 966
11 740
21 0008
11
7
4
8$ 18 952
25 750
25 094
14 600
17 5307
10
10
6
7
Total current assets 104 386 38 101 926 39
NON-CURRENT ASSETS
Property, plant and equipment
Agricultural assets
Intangible assets87 174
53 748
32 97031
19
1271 722
49 368
40 90427
19
15
Total non-current assets 173 892 62 161 994 61
Total assets 278 278 100 263 920 100
(continued)