21) Reimer Company reports the following data:
|
2015
|
2014
|
Sales
|
100%
|
100%
|
Cost of Goods Sold
|
40%
|
30%
|
Gross Profit
|
60%
|
70%
|
Operating Expenses
|
35%
|
30%
|
Net Income
|
25%
|
40%
|
When evaluating the results of operations, what can be said about Reimer Company?
A) Using vertical analysis, the company's profitability declined in 2014.
B) Using horizontal analysis, the company's profitability declined in 2014.
C) Using vertical analysis, the company's profitability declined in 2015.
D) Using horizontal analysis, the company's profitability declined in 2015.
22) Wilhelm Company's gross profit percentages for the past 3 years are:
Year
|
Gross Profit Percentages
|
2015
|
25%
|
2014
|
22.4%
|
2013
|
22.3%
|
Based on the above data, what can be said about the Wilhelm Company?
A) The sales volume is decreasing.
B) The company is decreasing the income tax expense.
C) The company is controlling operating expenses.
D) The company is controlling cost of goods sold.
23) Hull Company reports the following data:
Year
|
Total Operating Expenses to Net Sales
|
2010
|
18%
|
2011
|
20%
|
2012
|
24%
|
2012 Industry Average
|
15%
|
Based on the above data, what can be said about the Hull Company?
A) The company is controlling operating expenses.
B) The company is reducing sales levels over time.
C) The company is losing control of operating expenses.
D) The company is increasing sales over time.
24) In 2014, the Zenon Company reported that property, plant and equipment were equal to 17% of total assets. In 2014, current assets were equal to 83% of total assets. In 2015 the company reported that property, plant and equipment were equal to 27% of total assets. In 2015, current assets were equal to 73% of total assets. What conclusion can be reached from this information?
A) In 2015, the company is downsizing.
B) In 2015, property, plant and equipment as a proportion of total assets increased.
C) In 2015, the company is investing in the future.
D) B and C
25) Prepare a vertical analysis for Katrina Corporation using the information shown below. Round percentages to the nearest one-tenth percent of one percent.
|
2015
|
Sales
|
$550,000
|
Cost of goods sold
|
250,000
|
Gross profit
|
300,000
|
Operating expenses
|
150,000
|
Net income
|
150,000
|
26) Dynasty Incorporated has the following data available at December 31, 2015:
Total current assets
|
900
|
|
Property, plant and equipment
|
1,200
|
|
Intangible assets
|
300
|
|
Total current liabilities
|
600
|
|
Long-term debt
|
500
|
|
Common stock
|
400
|
|
Additional paid-in capital
|
800
|
|
Retained earnings
|
100
|
|
Prepare a vertical analysis of this company's balance sheet. Round to the nearest one-tenth of one percent.