615 Chapter 13 Analysis of Financial Statements Compute the

615 Chapter 13 Analysis of Financial Statements Compute the annual dollar changes and percent changes for each of the following accounts. QS 13-3 Hortzontal analysis P1 Short-term inwestments 5374634 $234,000 Notes payab.. 0 88,000 Use the following information for Tide Corporation to determine the 2016 and 2017 trend percents for net os 13-4 sales esing 2016 as the hase year. Trend percents P1 thousands 2016 Net sales $801,810 $453,000 92,887 13408 Refer to the information in QS 13-4. Use that information for Tide Corporation to determine the 2016 and 2017 common-size percents for cost of goods sold using net sales as the base. Os 13.s Common sze analysls P2 For each ratio listed, identify whether the change in ratio value from 2016 to 2017 is usually regarded as os 13-6 favorable or unfavorabla. Ratio Interpretation P3 2017 2016 9% 47% 34% 100 1 Proft nargin. 8% 42% 46% $125 $1.10 3.5 3.4 20% 12% 6. Bansic earnings per share -7. Inventory turnover. - -3. Gross margin . . 1.15-8 D Dividend yield The following information is available for Morgan Company and Parker Compaay, similac firms operating in the same industry. Write a half-page report comparing Morgan and Parker using the available information Your discussion should inchade their ability to meet current obligations and to use curreat assets efficiently. QS 13-7 Anelysls of short-term fnanclal conditon A1 Morgan 2017 2.7 2.5 15.2 13.0 3 Current ratio Acid-best ratio Accounts receivable turnover 25.2 21.9 292 17.1 30.5 14.5 6 Merchandise inventory turnover 7 Working capital 242 $70.000 $58,000 $52,000$131,000 $10300078,000eam ce a loan dechuon A review of the notes payable files discovers that three years ago the company reported the entire $1,000 as 13 cash payment (consisting of $800 principal and $200 interest) toward an instalment note est expense. This mistake had a material effect on the amount of income in that year. How should the A2 correction be reported in the current-year financial statements? payable as inter. Eror adustments OS 13-9 Answer each of the following related to international accounting and analysis. a. Identify a limitation to asing ratio analysis when examining companies reporting under different ac meationl ro enais C2 counting systems such as IFRS versus U.S. GAAP b. Identify an advantage to using horizcntal and vertical analyses when examining companies reporting under differeot currencies.

Solution

QS 13-3.

QS 13-4.

QS 13-5.

QS 13-6  

	2017	2016	Change
Dollars	%
Short term investments	374634	234000	140634	60%
Accounts Receivable	97364	101000	-3636	-4%
Notes Payable	0	88000	-88000	-100%