Balance Sheets and Income Statements

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Nmcra30

Business Finance

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Complete parts A and B of this exercise in the Excel file. Be sure to notice that Part A is a balance sheet and Part B is an income statement. Also, be sure to note that the most recent year is shown on the left in these financial statements. Formulas and examples for interpretation of results can be found in Table 21-1 on the last worksheet tab of this file.

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INSTRUCTIONS: Complete parts A and B of this exercise. Examples can be found in Chapter 21 of your textbook. Be sure to notic statement. Also, be sure to note that the most recent year is shown on the left in these financial statements. Fo be found in Table 21-1 of your textbook or the last worksheet tab o ONS: extbook. Be sure to notice that Part A is a balance sheet and Part B is an income e financial statements. Formulas and examples for interpretation of results can the last worksheet tab of this file. Part A - Chapter 21 in your textbook contains examples that will be helpful for completing the exercises below. 1. Using Excel formulas, prepare a vertical analysis for 2017 for the balance sheet below (only use 2017). 2. Using Excel formulas, prepare a horizontal analysis for the balance sheet below (use 2016 & 2017 - also note th 3. Compute the following ratios and show the answer to two digits past the decimal: (i) the current ratio, (ii) the indicated below in yellow for calculating your ratios. Formulas for this exercise are located on page 779 in your te Current ratio: Acid-test ratio: 4. Using Table 21-1, how would you interpret the current ratio result you computed above? 5. Using Table 21-1, how would you interpret the acid-test ratio result you computed above? Green's Landscaping Balance Sheet December 31, 2016 and 2017 Assets Current Assets Cash Accounts receivable Merchandise inventory Total current assets Plant and equipment Equipment Total assets 2017 2016 $5,275 7,305 45,522 58,102 $4,507 5,118 48,722 58,347 20,173 78,275 25,942 84,289 Liabilities Current liabilities Accounts payable Wages payable Total current liabilities Long-term liabilities Mortgage note payable Total liabilities 3,809 2,432 6,241 4,476 1,973 6,449 36,454 42,695 45,899 52,348 Owner's Equity A. Green, capital Total liabilities and owner's equity 35,580 78,275 31,941 84,289 ting the exercises below. (only use 2017). 2016 & 2017 - also note the order of the columns below). the current ratio, (ii) the acid-test ratio. Use Excel formulas in the cells ed on page 779 in your textbook or on the Table 21-1 tab in this Excel file. Part B - Chapter 21 in your textbook contains examples that will be helpful for completing the exercises below. 1. Using the information below, prepare a vertical analysis for the income statement for 2017. 2. Using the information below, prepare a horizontal analysis of the income statement from 2017. 3. In which areas, if any, has the company seen increases since 2016? 4. In which areas, if any, has the company seen decreases since 2016? 5. Compute the following ratio and show the answer to two digits past the decimal. Use an Excel formula in the c Operating ratio: 6. Using table 21-1, how would you interpret this ratio? Artie's Painting Income Statement For the Years Ending December 31, 2016 and 2017 Net sales Cost of goods sold Gross profit Operating expenses Net income 2017 $24,789 15,323 9,466 3,873 5,593 2016 $23,642 14,239 9,403 3,702 5,701 completing the exercises below. ment for 2017. tement from 2017. mal. Use an Excel formula in the cell indicated below in yellow for calculating your ratio. Cleaves, C., Hobbs, M., & Noble, J. (2017). Business Math (11th ed.). New York City, NY: Pearson Educa
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