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Horizontal and vertical analysis

The company balance sheets of Ramsey Corp. are presented below.
Ramsey Corp. Comparative Balance Sheets
December 31 2007 2006
Assets $ $
-current assets 76,000 80,000
Property,plant,and 99,000 90,000
equipment(net)
Intangibles 25,000 40,000
-----------------------------------------------
-Total assess $200,000 $210,000
___________________________________
Liabilities and stock- $ $
holders equity
-current liabilities 40,800 48,000
long term liabilities 143,000 150,000
stockholders equity 16,200 12,000
-------------------------------------------------
-Total liabilities & $200,000 $210,000
stockholders equity

Instructions:
a.prepare a horizontal analysis of the balance sheet data for Ramsey corp. using 2006 as a base.
b. Prepare a vertical analysis of the balance sheet data for Ramsey corp. in columnare form for 2007.

Solution Preview

Please see the attached file

a. In Horizontal analysis, we calculate the percentage change in the value for each variable in respect to the base. For example the current ...

Solution Summary

The solution explains how to prepare a horizontal and vertical analysis.

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