SMITH CORPORATION Vertical analysis

Sales $1,000,000 100%

Cost of Goods Sold ($600,000) 60%
Gross Profit $400,000 40%
S & A expenses ($224,000) 22%
Depr. Expense ($50,000) 5%
Operating Profit $126,000 13%
Interest Expense ($21,000) 2%
Earnings before taxes $105,000 11%
Tax expense ($52,500) 5%
Net Income $52,500 5% 100%

Lease payments $ 7,000.00

Analyze
JONES CORPORATION Vertical analysis

Sales $1,250,000 100%

Cost of Goods Sold ($750,000) 60%
Gross Profit $500,000 40%
S & A expenses ($257,000) 21%
Depr. Expense ($50,000) 4%
Operating Profit $193,000 15%
Interest Expense ($8,000) 1%
Earnings before taxes $185,000 15%
Tax expense ($92,500) 7%
Net Income $92,500 7% 100%

Lease payments $ 7,000.00

SMITH CORPORATION
Horizontal analysis
Current Assets: Year X Year X +1
Cash $30,000 $35,000 16.67% 5,000.00
Marketable Securities $7,500 $7,500 0.00% 0.00
Accounts Receivable $58,000 $70,000 20.69% 12,000.00
Inventory $65,000 $75,000 15.38% 10,000.00
Long - Term Assets:
Fixed Assets $464,500 $500,000 7.64% 35,500.00
Accumulated Depr. ($240,000) ($250,000) 4.17% -10,000.00
Net Fixed assets $224,500 $250,000 11.36% 25,500.00

Total Assets $385,000 $437,500 13.64% 52,500.00

Liabilities:
Acct. Payable $70,000 $75,000 7.14% 5,000.00
Bonds Payable $210,000 $210,000 0.00% 0.00

Stockholders' Equity
Common Stock $75,000 $75,000 0.00% 0.00
Paid in Capital $30,000 $30,000 0.00% 0.00
Retained Earnings $0 $47,500 47,500.00

Total S.E & Liabilities $385,000 $437,500 13.64% 52,500.00

Analyze
 JONES CORPORATION
l analysis Horizontal analysis
Current Assets: Year X Year X +1
Cash $18,000 $20,000 11.11%
Accounts Receivable $90,000 $80,000 -11.11%
Inventory $60,000 $50,000 -16.67%
Long - Term Assets:
Fixed Assets $500,000 $500,000 0.00%
Accumulated Depr. ($135,000) ($150,000) 11.11%
Net Fixed assets $365,000 $350,000 -4.11%
Total Assets $533,000 $500,000 -6.19%

Liabilities:
Acct. Payable $150,000 $100,000 -33.33%
Bonds Payable $100,000 $80,000 -20.00%

Stockholders' Equity
Common Stock $150,000 $150,000 0.00%
Paid in Capital $70,000 $70,000 0.00%
Retained Earnings $63,000 $100,000 58.73%

Total S.E & Liabilities $533,000 $500,000 -6.19%

Horizontal analysis

2,000.00

-10,000.00

-10,000.00

0.00

-15,000.00

-15,000.00

-33,000.00

-50,000.00

-20,000.00

0.00

0.00

37,000.00

-33,000.00
# Ratio Formula

1 Profit Margin

2 Return on assets

3 Return on Equity

4 Receivable turnover

5 Aver.Collection Period

6 Inventory Turnover

7 Fixed Asset Turnover

8 Total Asset Turnover

8 Total Asset Turnover

9 Current Ratio

10 Quick Ratio

11 Debt to total assets

12 Times Interest Earned

 Jones Corp.
Formula Calculation

Net Income 92,500

Sales 1,250,000

Net Income 92,500

Total Assets 500,000

Net Income 92,500

Stockholders' Equity 320,000

Sales (credit) 1,250,000

Accounts Receivable 80,000

Accounts Receivable 80,000

Average sales daily to credit 3,425

Cost of Goods Sold 750,000

Inventory 50,000

Sales 1,250,000
Fixed Assets 500,000
 Sales 1,250,000
Total Assets 500,000

Current Assets 150,000

Current Liabilities 180,000

Current Assets -Inventory 50,000

Current Liabilities 180,000

Total Debt 180,000

Total Assets 500,000

Earnings Before Interest and Taxes 193,000

Interest 8,000
ones Corp. Smith Corp.
Industry
Calculation Calculation
average

52,500
7%
7.40% 1,000,000 5.25%

52,500
15%
18.50% 437,500 12.00%

52,500
30%
28.91% 152,500 34.43%

1,000,000
11.5
15.63 70,000 14.29

70,000
31
23.36 2,740 25.55

600,000
12
15.00 75,000 8.00

1,000,000
4.5
2.50 500,000 2.00

3
 1,000,000
3
2.50 437,500 2.29

187,500
1.5
0.83 285,000 0.66

37,500
1.15
0.28 285,000 0.13

285,000
60%
36.00% 437,500 65.14%

126,000
8
24.13 21,000 6.00
Analyze