Horizontal and Vertical Analysis

 

P7. Rylander Corporation’s condensed comparative income statements and balance sheets for 2014 and 2013 follow.

 

 

 

Rylander Corporation Comparative Income Statements

 

For the years ended December 31, 2014 and 2013

 

 

 

Â	2014	Â	2013
Net sales	$6,553,600	Â	$6,292,800
Cost of goods sold	4,177,600	Â	4,016,800
Gross margin	$2,376,000	Â	$2,276,000
Operating expenses:	Â	Â	Â
Selling expenses	$   953,600	Â	$1,036,000
Administrative expenses	894,400	Â	846,400
Total operating expenses	$1,848,000	Â	$1,882,400
Income from operations	$   528,000	Â	$   393,600
Interest expense	131,200	Â	78,400
Income before income taxes	$   396,800	Â	$   315,200
Income taxes expense	124,800	Â	113,600
Net income	$   272,000	Â	$   201,600
Earnings per share	$         3.40	Â	$         2.52

 

 

 

 

 

 

 

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Chapter Assignments                                                                                                                                           701

 

Rylander Corporation Comparative Balance Sheets December 31, 2014 and 2013

 

 

 

Cash	  Assets	2014   $   162,400	Â	2013   $     81,600
Accounts receivable (net)	Â	471,200	Â	458,400
Inventory	Â	1,149,600	Â	1,189,600
Property, plant, and equipment (net)	Â	1,500,000	Â	1,440,000
Total assets	Â	$3,283,200	Â	$3,169,600
Liabilities and Stockholders’ equity
Accounts payable		$   535,200	Â	$   954,400
Notes payable (short-term)		400,000	Â	800,000
Bonds payable		800,000	Â	—
Common stock, $10 par value		800,000	Â	800,000
Retained earnings		748,000	Â	615,200
Total liabilities and stockholders’ equity		$3,283,200	Â	$3,169,600

 

 

 

ReQUIReD

 

1.    Prepare schedules showing the amount and percentage changes from 2013 to 2014 for the comparative income statements and the balance sheets. (Round to one deci- mal place.)

 

2.    Prepare common-size income statements and balance sheets for 2013 and 2014. (Round to one decimal place.)

 

3.    aCCoUntinG ConneCtion ▶ Comment on the results in requirements 1 and 2 by identifying favorable and unfavorable changes in the components and composition of the statements.

 

 

 

LO 3