Horizontal Analysis of Balance

Sheet For the Year 2021 & 2022

ASSETS 2021 2022 Amount Percentage

Increase Increase
(Decrease) (Decrease)
Current Assets:
Cash 4,976,330 2,869,876 -2,106,454 -42.33%
Petty Cash 10,000 10,000 0 0.00%
Accounts receivable 7,127,853 4,180,016 -2,947,837 -41.36%
Finish Goods Inventory 392,300 312,029 -80,271 -20.46%
Work In Process Inventory 545,117 428,519 -116,598 -21.39%
Raw Materials Inventory 134,280 94,159 -40,121 -29.88%
Indirect Materials Inventory 76,749 53,818 -22,931 -29.88%
Office Supplies 2,487 2,195 -292 -11.74%
Prepaid Rent 652,800 652,800 0 0.00%
Total Current Assets 13,917,916 8,603,412 -5,314,504 -38.18%
Non-current Assets:
Property, Plant & 3,434,400 3,434,400 0 0.00%
Equipment
Less: Accumulated 1,192,572 596,286 -596,286 -50.00%
Depreciation
Total Non-current Assets 2,241,828 2,838,118 596,290 26.60%
Total Assets 16,159,744 11,441,526 -4,718,218 -29.20%
Liabilities and Equity
Current Liabilities:
Accounts Payable 1,253,458 423,379 -830,079 -66.22%
Income tax payable 1,235,689 450,329 -785,360 -63.56%
Salaries Payable 274,528 258,375 -16,153 -5.88%
SS premiums payable 24,449 22,638 -1,811 -7.41%
Philhealth premiums 4,118 3,813 -305 -7.41%
payable
Pag-ibig premiums payable 6,496 5,800 -696 -10.71%
EC premium payable 594 530 -64 -10.77%
Utilities payable 13,414 11,836 -1,578 -11.76%
Repair and & maintenance 472 417 -55 -11.65%
payable
Advertising payable 3,955 3,490 -465 -11.76%
Total current liabilities 2,817,171 1,180,605 -1,636,566 -58.09%
Shareholders' Equity:
Ordinary Shares 9,000,000 9000000 0 0.00%
Retained Earnings 4,342,573 1,260,921 -3,081,652 -70.96%
Total Equity 13,342,573 10,260,921 -3,081,652 -23.10%
 Total Liabilities & Equity 16,159,744 11,441,526 -4,718,218 -29.20%

To interpret Cash:
Peso change = 2,869,876 – 4,976,330 = (P2,106,454)
Percentage Change = -2,106,454\4,976,330 = -42.33%
This is evaluated that Cash decreased by P2,106,454. This represents a decline of 42.33% from
the year 2021.

Horizontal Analysis of Income

Statement For the year 2021 & 2022
2,021 2,022 Amount Increase Percentage
(Decrease) Increase
(Decrease)
Sales 24,331,395 16,720,063 -7,611,332 -31.28%
Less: Cost of Good Sold 13,002,527 9,972,432 -3,030,095 -23.30%
Gross Profit 11,328,867 6,747,631 -4,581,236 -40.44%
Less: Operating 4,267,789 4,174,323 -93,466 -2.19%
Expenses
Operating Income 7,061,079 2,573,307 -4,487,772 -63.56%
Less: Income Tax of 2,118,324 771,992 -1,346,332 -63.56%
30%
Net Income after Tax 4,942,755 1,801,315 -3,141,440 -63.56%

To interpret Sales:
Peso change = 16,720,063 – 24,331,395 = (P7,611,332)
Percentage change = -7,611,332\24,331,395 = -31.28%
This is evaluated that Sales decreased by P7,611,332. This represents a decline of 31.28% from
the year 2021.

Vertical Analysis of Income

Statement As of December 31, 2021
Percentage (Item\Net
Sales)
Sales 24,331,395 100.00%
Less: Cost of Good Sold 13,002,527 53.44%
 Gross Profit 11,328,867 46.56%
Less: Operating Expenses 4,267,789 17.54%
Operating Income 7,061,079 29.02%
Less: Income Tax of 30% 2,118,324 8.71%
Net Income after Tax 4,942,755 20.31%

The above may be evaluated as flows:

The Cost of Goods Sold is 53.44% of Sales. The Company has a gross profit rate of 46.56%.
Operating expenses are 17.54% of Sales.
The Company earns income of P0.20 for every peso of sales.
Gross Profit generated for every peso of sale is 0.46.

Vertical Analysis of Balance

Sheet As of December 31, 2021

ASSETS 2021 Percentage

(Item/Total
Assets)
Current Assets:
Cash 4,976,330 30.79%
Petty Cash 10,000 0.06%
Accounts receivable 7,127,853 44.11%
Finish Goods Inventory 392,300 2.43%
Work In Process Inventory 545,117 3.37%
Raw Materials Inventory 134,280 0.83%
Indirect Materials Inventory 76,749 0.47%
Office Supplies 2,487 0.02%
Prepaid Rent 652,800 4.04%
Total Current Assets 13,917,916 86.13%
Non-current Assets:
Property, Plant & Equipment 3,434,400 21.25%
Less: Accumulated Depreciation 1,192,572 7.38%
Total Non-current Assets 2,241,828 13.87%
Total Assets 16,159,744 100.00%
Liabilities and Equity
Current Liabilities:
Accounts Payable 1,253,458 7.76%
Income tax payable 1,235,689 7.65%
Salaries Payable 274,528 1.70%
 SS premiums payable 24,449 0.15%
Philhealth premiums payable 4,118 0.03%
Pag-ibig premiums payable 6,496 0.04%
EC premium payable 594 0.00%
Utilities payable 13,414 0.08%
Repair and & maintenance payable 472 0.00%
Advertising payable 3,955 0.02%
Total current liabilities 2,817,171 17.43%
Shareholders' Equity:
Ordinary Shares 9,000,000 55.69%
Retained Earnings 4,342,573 26.87%
Total Equity 13,342,573 82.57%
Total Liabilities & Equity 16,159,744 100.00%

The above may be evaluated as follows:

The largest component of Asset is Account Receivable at 44.11%, followed by Cash which is
30.79%.
Office supplies is the smallest component at 0.02%.
On the other hand, 17.43% of Asset are financed by debt and the remaining 82.57% is
financed by Equity.