Baileys Limited

Advanced Accounting Assignment.

Financial Report.

1. Prepare the Vertical Analysis of the Income Statement for each Company

Income statement | Bailey Ltd. | % | Snoopy Ltd. | % | Differentiate | % |

sales | 2797000 | 100.00 | 2454000 | 100 | 343000 | 0.00 |

COGS | 1790000 | 64.00 | 1594000 | 64.96 | 196000 | -0.96 |

gross margin | 1007000 | 36.00 | 860000 | 35.04 | 147000 | 0.96 |

operating expenses | 807000 | 28.85 | 663000 | 27.02 | 144000 | 1.84 |

operating incomes | 200000 | 7.15 | 197000 | 8.03 | 3000 | -0.88 |

interest expense | 70000 | 2.50 | 43000 | 1.75 | 27000 | 0.75 |

income before income tax | 130000 | 4.65 | 154000 | 6.28 | -24000 | -1.63 |

income tax expense | 52000 | 1.86 | 62000 | 2.53 | -10000 | -0.67 |

net income | 78000 | 2.79 | 92000 | 3.75 | -14000 | -0.96 |

Balance sheet | Bailey Ltd. | % | Snoopy Ltd. | % | Differentiate | % |

cash | 66000 | 5.51 | 27000 | 2.43 | 39,000 | 3.08 |

accounts recievable | 241000 | 20.12 | 262000 | 23.60 | -21,000 | -3.49 |

inventory | 87000 | 7.26 | 110000 | 9.91 | -23,000 | -2.65 |

prepaid expenses | 12000 | 1.00 | 7000 | 0.63 | 5,000 | 0.37 |

plant and equipment | 792000 | 66.11 | 704000 | 63.42 | 88,000 | 2.69 |

total assets | 1198000 | 100.00 | 1110000 | 100.00 | 88,000 | |

| | | | | | |

accounts payable and accrued liabilities | 191000 | 15.94 | 173000 | 15.59 | 18,000 | 0.36 |

Long-term debt | 635000 | 53.01 | 310000 | 27.93 | 325,000 | 25.08 |

total liabilities | 826000 | | 483000 | | | |

| | | | | | |

common shares | 50000 | 4.17 | 200000 | 18.02 | -150000 | -13.84 |

retained earnings | 322000 | 26.88 | 427000 | 38.47 | -105000 | -11.59 |

total owners equity | 372000 | | 627000 | | | |

| 1198000 | 100.00 | 1110000 | 100.00 | 88000 | |

2. Prepare ratio calculations to assess profitability, solvency and liquidity for each company

Ratio Calculations | Baileys Ltd. | Snoopy Ltd. |

1. Profitable...