Accounting 2

• Éditeur: QuickStudy Reference Guides
• Année: 2009
• ISBN:
  9781423211891
• Sujet: Betriebswirtschaft
• Sous-sujet: Buchhaltung

Our best-selling Accounting 2 guide has now gotten even better, thanks to the latest up-to-date information added to the original text. The new material within this 3-panel (6 page)guide goes further into the various accounting practices that businesses use to keep financially afloat; mathematical equations, charts, and tables are also included in an easy-to-use format.

FINANCIAL ANALYSIS

1. Horizontal analysis
   1. Evaluation of financial statement data over period of time
   2. Increases or decreases of financial items are determined
   3. Changes are shown in dollars and by percentage
      1. Find the difference between the most current period balance and the previous period balance for each item on the balance sheet
      2. Calculate the percentage change as follows: Dollar change ÷ balance from previous period × 100
   4. Example of a horizontal analysis of a balance sheet:

Balance Sheet
			Change
	2010	2009	Amount	Percent
Assets
Current assets	$1,000,000	$970,000	$30,000	3.1%
Plant assets (net)	825,000	675,000	150,000	22.2%
Intangible assets	16,000	18,500	(2,500)	-13.5%
Totals assets	$1,841,000	$1,663,500	$177,500	11.8%
Liabilities
Current liabilities	$350,000	$305,100	$44,900	14.7%
Long-term liabilities	547,000	567,000	($20,000)	-3.5%
Total liabilities	$897,000	$872,100	$24,900	11%
Stockholders’ Equity
Common stock	290,000	280,000	10,000	3.6%
Retained earnings	654,000	511,400	142,600	27.9%
Total stockholders’ equity	944,000	791,400	152,600	31.5%
Total liabilities & stockholders’ equity	$1,841,000	$1,663,500	$177,500	11%

1. 5. Example of a horizontal analysis of an income statement:

Income Statement
			Change
	2010	2009	Amount	Percent
Sales	$2,200,000	$1,970,000	$230,000	11.7%
Sales returns & allowances	100,000	125,000	(25,000)	-20.0%
Net sales	$2,100,000	$1,845,000	255,000	13.8%
Cost of good sold	1,381,000	1,150,000	231,000	20.1%
Gross profit	$719,000	$695,000	24,000	3.5%
Selling expenses	254,000	212,500	41,500	19.5%
Administrative expenses	106,000	109,000	(3,000)	-2.8%
Total operating expenses	360,000	321,500	38,500	12.0%
Income from operations	359,000	373,500	(14,500)	-3.9%
Other revenues & gains Interest & dividends	10,000	11,500	(1,500)	-13.0%
Other expenses & losses Interest expense	35,000	41,200	(6,200)	-15.0%
Income before income taxes	314,000	320,800	(6,800)	-2.1%
Income tax expense	142,500	168,000	(25,500)	-15.2%
Net income	$171,500	$152,800	$18,700	12.2%

2. Vertical analysis
   1. Evaluation of financial statement data that expresses each item as a percent of a base amount
      1. Each item on the income statement is divided by net sales
      2. Each item on the balance sheet is divided by total assets
   2. Example of a vertical analysis of an income statement:

Income Statement
	2010
	Amount	Percent	2009	Percent
Sales	$2,200,000	104.8%	$1,970,000	106.8%
Sales returns & allowances	100,000	4.8%	125,000	6.8%
Net sales	$2,100,000	100.0%	$1,845,000	100.0%
Cost of good sold	1,381,000	65.8%	1,150,000	62.3%
Gross profit	$719,000	34.2%	$695,000	37.7%
Selling expenses	254,000	12.1%	212,500	11.5%
Administrative expenses	106,000	5.0%	109,000	5.9%
Total operating expenses	360,000	17.1%	321,500	17.4%
Income from operations	359,000	17.1%	373,500	20.2%
Other revenues & gains Interest & dividends	10,000	0.5%	11,500	0.6%
Other expenses & losses Interest expense	35,000	1.7%	41,200	2.2%
Income before income taxes	314,000	15.0%	320,800	17.4%
Income tax expense	142,500	6.8%	168,000	9.1%
Net income	$171,500	8.2%	$152,800	8.3%

1. 3. Example of a vertical analysis of a balance sheet:

...

Balance Sheet
	2010		2009
	Amount	Percent	Amount	Percent
Assets
Current assets	$1,000,000	54.3%	$970,000	58.3%
Plant assets (net)	825,000	44.8%	675,000	40.6%
Intangible assets	16,000	0.9%	18,500	1.1%
Totals assets	$1,841,000