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Horizontal and Vertical Analyses of Balance Sheet Data

The comparative condensed balance sheets of Conard Corporation are presented below.

CONARD CORPORATION
Comparative Condensed Balance Sheets
December 31

2012 // 2011
Assets
Current assets $ 73,610 // $ 79,730
Property, plant, and equipment (net) 99,050 // 89,870
Intangibles 27,450 // 39,620
Total assets $200,110 // $209,220

Liabilities and stockholders' equity
Current liabilities $ 41,830 // $ 48,180
Long-term liabilities 143,710 // 149,470
Stockholders' equity 14,570 // 11,570
Total liabilities and stockholders' equity $200,110 // $209,220

1. Prepare a horizontal analysis of the balance sheet data for Conard Corporation using 2011 as a base.
2. Prepare a vertical analysis of the balance sheet data for Conard Corporation in columnar form for 2012.

Solution Preview

In a horizontal analysis, we compare each year by determining the percentage of change between the two years. We divide the 1st year with the second year. For example, the columns would be set up as follows:

Current assets:
73,610 // 79,730
0.92 = 92% ...

Solution Summary

In this solution, I help the student complete a full horizontal analysis and a full vertical analysis based on the financial statement information given for Conard Corporation.

$2.19