Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 10, Problem 3SEA
To determine
Perform horizontal analysis for net revenue and cost of sales in both dollar sales and in percentages using 2010 as a base year.
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A condensed income statement for Weber Associates and a partially completed vertical analysis follow.
Required:
1. Complete the vertical analysis by computing each missing line item as a percentage of net revenues. TIP: In the prior year, Cost of
Goods Sold was 31 percent of Net Revenues, computed as ($1,397 ÷ $4,571).
2. Does Cost of Goods Sold, as a percentage of Net Revenues, represent better or worse performance in 2019 as compared to 2018?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Complete the vertical analysis by computing each missing line item as a percentage of net revenues. TIP: In the prior year,
Cost of Goods Sold was 31 percent of Net Revenues, computed as ($1,397 ÷ $4,571). (Decreases should be indicated by a
minus sign. Round your answers to the nearest whole percent.)
Net Revenues
Cost of Goods Sold
Research and Development Expense
Sales and Marketing Expense
General and Administrative Expense
Income from Operations
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Mivatin
Products Ltd. reported the following on its 2011 comparative income statement:
(In millions)
2011
2010
2009
Net sales
$148.5
$139.0
$149.5
Cost of sales
129.5
108.0
114.0
Perform a horizontal analysis of net sales, cost of sales, and gross margin, both in dollar amounts and in percentages, for 2011 and 2010.
(Round the percentages to one decimal place, X.X%. Use a minus sign or parentheses to indicate a decrease.)
Mivatin Products Ltd.
Income Statement - (Adapted)
For the Year Ended December 31, 2011 and 2010
Increase/(Decrease)
(amounts in millions)
2011
2010
2011
2010
2009
Amt.
%
Amt
%
Net sales
$148.5
$139.0
$149.5
Cost of sales
129.5
108.0
114.0
Gross margin
A company’s comparative statements are given below. Please conduct the following analyses:
c. Calculate the three profitability ratios for year 2017 and show how ROE can be derived from the DuPont formula for this company.
d. What do the analyses tell you about the company’s financial performance?
Chapter 10 Solutions
Financial Accounting
Ch. 10 - Prob. 1YTCh. 10 - Prob. 2YTCh. 10 - Prob. 3YTCh. 10 - Prob. 4YTCh. 10 - Prob. 5YTCh. 10 - Define the items that the Financial Accounting...Ch. 10 - Prob. 2QCh. 10 - Prob. 3QCh. 10 - Prob. 4QCh. 10 - Prob. 5Q
Ch. 10 - Prob. 6QCh. 10 - What is solvency? Which ratios are useful for...Ch. 10 - What is profitability? Which ratios are useful for...Ch. 10 - What are market indicators? Which ratios are...Ch. 10 - Prob. 10QCh. 10 - Prob. 1MCQCh. 10 - Current assets for Kearney Company are 120,000 and...Ch. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 6MCQCh. 10 - Prob. 7MCQCh. 10 - Prob. 8MCQCh. 10 - Prob. 9MCQCh. 10 - Prob. 10MCQCh. 10 - Prob. 1SEACh. 10 - Prob. 2SEACh. 10 - Prob. 3SEACh. 10 - Prob. 4SEACh. 10 - Prob. 5SEACh. 10 - A five-year comparative analysis of Low Light...Ch. 10 - Prob. 7SEACh. 10 - Prob. 8SEBCh. 10 - Prob. 9SEBCh. 10 - Prob. 10SEBCh. 10 - Perform a vertical analysis on the following...Ch. 10 - Prob. 12SEBCh. 10 - Prob. 13SEBCh. 10 - Use the following information to construct a...Ch. 10 - Prob. 16EACh. 10 - Prob. 17EACh. 10 - Prob. 18EACh. 10 - Prob. 19EACh. 10 - Use the balance sheets from Suzannes Hotels in...Ch. 10 - Prob. 21EACh. 10 - Prob. 22EACh. 10 - Prob. 23EACh. 10 - Use the statements of earnings for Campbell Soup...Ch. 10 - Prob. 25EACh. 10 - Prob. 26EACh. 10 - Prob. 27EACh. 10 - Prob. 28EBCh. 10 - Prob. 29EBCh. 10 - Prob. 30EBCh. 10 - Prob. 31EBCh. 10 - Prob. 32EBCh. 10 - Prob. 33EBCh. 10 - Prob. 34EBCh. 10 - Prob. 35EBCh. 10 - Prob. 36EBCh. 10 - Prob. 37EBCh. 10 - Prob. 38EBCh. 10 - Prob. 39EBCh. 10 - Prob. 40EBCh. 10 - Prob. 41PACh. 10 - Prob. 42PACh. 10 - Prob. 43PACh. 10 - Following are the income statements for Alpha...Ch. 10 - Prob. 45PACh. 10 - Prob. 46PACh. 10 - Prob. 47PACh. 10 - You are interested in investing in Teddy Company,...Ch. 10 - Prob. 49PBCh. 10 - Prob. 50PBCh. 10 - Prob. 51PBCh. 10 - Prob. 52PBCh. 10 - Prob. 53PBCh. 10 - Prob. 54PBCh. 10 - Prob. 55PBCh. 10 - Prob. 56PBCh. 10 - Prob. 1CTPCh. 10 - Prob. 2CTP
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