Mathematics Assignment 5.1

1. Complete the vertical and horizontal analysis of the comparative balance sheet for Seymour's Videos, Inc. Express percent’s to the nearest tenth of a percent.

Seymour's Videos, Inc.

Comparative Balance Sheet

December 31, 2007 and 2008

Increase (decrease) Percent of total Assets

Assets 2008 2007 Amount Percent 2008 2007

Current Assets

Cash $2,374 $2,184 190 8.7 10.2 9.7

Accounts Receivable 5,374 4,286 1088 25.4 23.0 19.0

Merchandise inventory 15,589 16,107 518 3.2 66.8 71.3

Total assets $23,337 $22,577 760 3.4 100 100

Liabilities

Current liabilities

Accounts payable $7,384 $6,118 1266 20.7 31.6 27.1

Wages payable 1,024 964 60 6.2 4.4 4.3

Total liabilities 8,408 7,082 1326 18.7 36.0 31.4

Owner’s equity

James Seymour, capital 14,929 15,495 566 3.7 64.0 68.6

Total liabilities and owner’s equity $23,337

$22,577 760 3.4 100 100

2. Complete the following horizontal analysis of a comparative income statement.

Alonzo’s Auto Parts

Comparative Income Statement

For years ending June 30, 2008 and 2009

Increase (decrease)

Revenue 2009 2008 Amount Percent

Gross Sales $291,707 $275,873 15834 5.7

Sales returns and allowances 5,895 6,821 926 13.6

Net sales 285,812 269,052 16760 6.2

Cost of goods sold

Beginning inventory, July 1 35,892 32,587 3305 10.1

Purchases 157,213 146,999 10214 6.9

Ending inventory, June 30 32,516 30,013 2503 8.3

Cost of goods sold 160,589 149,573 11016 7.4

Gross profit from sales 125,223 119,479 5744 4.8

Operating expenses

Salary 42,000 40,000 2000 5.0

Insurance 3,800 3,800 0 0

Utilities 1,986 2,097 111 5.3

Rent 3,600 3,300 300 9.1

Depreciation 4,000 4,500 500 11.1

Total operating expenses 55,386 53,697 1689 3.1

Net income 69,837

65,782 4055 6.2

Find the current ratio for each of the following businesses. Round answers to the nearest hundredth.

Current assets Current liabilities

$174,316...