Accounting and Finance Foundations

Unit 11

Accounting and Finance Foundations Unit 11: Financial Analysis 831

Financial Analysis

Chapter 23

Vertical, Horizontal, Ratio, & Industry Analyses23.3.3

1. Clark Corporation - Calculate the various analysis ratios and indicators requested for each financial
   statement provided.
   Vertical Analysis – Express each item as a percentage of
   sales (%).

Vertical Analysis - Express each item as a percentage (%).

Clark Corporation

Income Statement

For the Year Ended December 31, 20XX

Clark Corporation

Balance Sheet

For the Year Ended December 31, 20XX

Amount Percentage

of Sales

ASSETS

Revenue: Current Assets Percentage

Net Sales $406,500 Cash in Bank $ 26,000

Cost of Merchandise Sold: Accounts Receivable 75,900

Merchandise Inventory, Jan. 1 100,800 Merchandise

Inventory

148,700

+ Net Purchases 316,600 Office Supplies 5,400

= Merchandise Available for Sale 417,400

• Merchandise Inventory, Dec. 31 148,700 Total Current Assets $ 256,000
  = Cost of Merchandise Sold 268,700
  Gross Profit on Sales 137,800 Property, Plant, & Equipment
  Operating Expenses: Office Equipment 23,500
  Selling Expenses 89,750 Building 68,000
  Administrative Expenses 21,050 Land 12,500
  Total Operating Expenses 110,800
  Operating Income 27,000 Total Property, Plant, & Equipment 104,000
  Federal Corporate Income Tax
  Expense

7,100 TOTAL ASSETS $ 360,000

Net Income 19,900

LIABILITIES

Current Liabilities

Notes Payable $ 25,200

Accounts Payable 44,300

Salaries Payable 15,500

Other Current

Liabilities

54,000

Total Current

Liabilities

139,000

Long-Term Liabilities

Mortgage Payable 26,000

Total Long-Term Liabilities 26,000

TOTAL LIABILITIES 165,000

STOCKHOLDER’S EQUITY

Common Stock, $100 par, 1,200 shares

issued

120,000

Retained Earnings 75,000

TOTAL STOCKHOLDER’S EQUITY 195,000

TOTAL LIABILITIES & SHAREHOLDER’S EQUITY $ 360,000

Student Assignment