95) Prepare a horizontal analysis for 2011 using the information provided by Rat Rack Incorporated below. What do these numbers tell you about Rat Rack's 2011 year? Using 2009 as the base year for Rat Rack prepare the trend percentages for the three year period 2009-2010. What do these trend percentages indicate about Rat Rack?
201120102009
Net sales$98,000$88,000$89,000
Cost of goods sold44,00035,00038,000
Gross margin$54,000$53,000$51,000
Operating expenses32,00031,00030,000
Net income$22,000$22,000$21,000
96) Prepare a vertical analysis for Young's Point Corporation's balance sheet to determine the component percentages of its assets, liabilities, and shareholders' equity. Round percentages to the nearest one-tenth percent.
Young's Point Corporation
Balance Sheet
December 31, 2010
Assets
Total current assets$ 320,000
Long-term investments100,000
Property, plant, and equipment, net855,000
Total assets$1,275,000
Liabilities
Total current liabilities$210,000
Long-term debt480,000
Total liabilities$690,000
Shareholders' equity
Total shareholders' equity$585,000
Total liabilities and shareholders' equity$1,275,000
97) Prepare vertical analysis calculations by filling in the far right column of the following balance sheet with the appropriate percentages.
Treetops Corporation
Balance Sheet
December 31, 2011
2011Percent
Current assets
Cash$10,000
Short-term investments7,000
Accounts receivable, net30,000
Inventory37,000
Prepaid expenses4,000
Total current assets$ 88,000
Property, plant, and equipment, net33,300
Other assets37,000
Total assets$158,300
Current liabilities
Short-term borrowings$ 28,400
Accounts payable20,000
Total current liabilities$ 48,400
Long-term debt37,500
Total liabilities$ 85,900
Shareholders' equity
Common shares$20,000
Retained earnings52,400
Total shareholders' equity$72,400
Total liabilities and shareholders' equity$158,300