Explore BrainMass
Share

Explore BrainMass

    Vertical Analysis and Ratio Calculations

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Please see attached file.
    Use Excel format.

    Mickey Company and Minnie Company: prepare a vertical analysis

    Art Mart Company: compute financial ratios

    © BrainMass Inc. brainmass.com October 9, 2019, 9:53 pm ad1c9bdddf
    https://brainmass.com/business/financial-ratios/vertical-analysis-and-ratio-calculations-200883

    Attachments

    Solution Preview

    Please see the attached file. 2 questions are in two sheets

    In vertical analysis all elements are expressed as a percentage of some base.
    For Income Statement the base in net sales and for Balance Sheet the base is total assets

    Vertical Analysis 2007
    Mickey Company % of Sales Minnie Company % of Sales
    Net Sales 490,000 100.00% 620,000 100.00%
    Cost of Goods Sold 231,000 47.14% 274,000 44.19%
    Gross Profit 259,000 52.86% 346,000 55.81%
    Operating Expenses 29,000 5.92% 97,000 15.65%
    Operating Profit 230,000 46.94% 249,000 40.16%
    Interest Expense 5,000 1.02% 3,000 0.48%
    Earnings Before Tax 225,000 45.92% 246,000 39.68%
    Income Tax Expense 68,000 13.88% 75,000 12.10%
    Net Income 157,000 32.04% ...

    Solution Summary

    The solution has two problems - Vertical analysis for Mickey and Minnie Company and calculation of various ratios for Art Mart Company

    $2.19