Horizontal and Vertical Analysis
Problem : Rylander Corporation's condensed comparative income statements and balance sheets for 2014 and 2013 follow.
Rylander Corporation Comparative Income Statements
For the years ended December 31, 2014 and 2013
|
2014
|
|
2013
|
|
Net sales
|
$6,553,600
|
|
$6,292,800
|
|
Cost of goods sold
|
4,177,600
|
|
4,016,800
|
|
Gross margin
|
$2,376,000
|
|
$2,276,000
|
|
Operating expenses:
|
|
|
|
|
Selling expenses
|
$ 953,600
|
|
$1,036,000
|
|
Administrative expenses
|
894,400
|
|
846,400
|
|
Total operating expenses
|
$1,848,000
|
|
$1,882,400
|
|
Income from operations
|
$ 528,000
|
|
$ 393,600
|
|
Interest expense
|
131,200
|
|
78,400
|
|
Income before income taxes
|
$ 396,800
|
|
$ 315,200
|
|
Income taxes expense
|
124,800
|
|
113,600
|
|
Net income
|
$ 272,000
|
|
$ 201,600
|
|
Earnings per share
|
$ 3.40
|
|
$ 2.52
|
Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Chapter Assignments
Rylander Corporation Comparative Balance Sheets December 31, 2014 and 2013
|
Cash
|
Assets
|
2014
$ 162,400
|
|
2013
$ 81,600
|
|
Accounts receivable (net)
|
|
471,200
|
|
458,400
|
|
Inventory
|
|
1,149,600
|
|
1,189,600
|
|
Property, plant, and equipment (net)
|
|
1,500,000
|
|
1,440,000
|
|
Total assets
|
|
$3,283,200
|
|
$3,169,600
|
|
Liabilities and Stockholders' equity
|
|
Accounts payable
|
$ 535,200
|
|
$ 954,400
|
|
Notes payable (short-term)
|
400,000
|
|
800,000
|
|
Bonds payable
|
800,000
|
|
-
|
|
Common stock, $10 par value
|
800,000
|
|
800,000
|
|
Retained earnings
|
748,000
|
|
615,200
|
|
Total liabilities and stockholders' equity
|
$3,283,200
|
|
$3,169,600
|
Required
1. Prepare schedules showing the amount and percentage changes from 2013 to 2014 for the comparative income statements and the balance sheets. (Round to one deci- mal place.)
2. Prepare common-size income statements and balance sheets for 2013 and 2014. (Round to one decimal place.)
3. Accounting Connection - comment on the results in requirements 1 and 2 by identifying favorable and unfavorable changes in the components and composition of the statements.
4. Determine and comment on the liquidity and profitability of the company.