Question Details

The comparative balance sheet of Grider Company 


Ex. 1
The following items were taken from the financial statements of Smalley, Inc., over a four-year
period:
Item 2003 2002 2001 2000
Net Sales $800,000 $650,000 $600,000 $500,000
Cost of Goods Sold 580,000 460,000 420,000 400,000
Gross Profit $220,000 $190,000 $180,000 $100,000
Instructions
Using horizontal analysis and 2000 as the base year, compute the trend percentages for net
sales, cost of goods sold, and gross profit. Explain whether the trends are favorable or
unfavorable for each item.
Ex. 2
The comparative balance sheet of Grider Company appears below:
GRIDER COMPANY
Comparative Balance Sheet
December 31,
____________________________________________________________________________
Assets 2003 2002
Current assets ...................................................................................... $ 360 $300
Plant assets .......................................................................................... 640 500
Total assets .................................................................................... $1,000 $800
Liabilities and stockholders' equity
Current liabilities ................................................................................... $ 150 $120
Long-term debt ..................................................................................... 240 160
Common stock ..................................................................................... 350 280
Retained earnings ................................................................................ 260 240
Total liabilities and stockholders' equity .......................................... $1,000 $800
Instructions
(a) Using horizontal analysis, show the percentage change for each balance sheet item using
2002 as a base year.
(b) Using vertical analysis, prepare a common size comparative balance sheet.



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