ACC 600: Accounting and Finance for Managers

Assignments: Week Five

Exercise 1

Performing horizontal analysis—income statement

Data for McCormick Designs, Inc. follow:

Instructions

1.       Prepare a horizontal analysis of the comparative income statement of McCormick Designs, Inc. Round percentage changes to one decimal place.

2.       Why did 2016 net income increase by a higher percentage than net sales revenue?

 

Exercise 2

Performing vertical analysis of a balance sheet

Tri Designs, Inc. has the following data:

Perform a vertical analysis of Tri Designs’s balance sheet for each year.

 

Exercise 3

Computing key ratios

The financial statements of Victory’s Natural Foods include the following items:

Compute the following ratios for the current year:

1.       Current ratio

2.       Cash ratio

3.       Acid-test ratio

4.       Inventory turnover

5.       Days’ sales in inventory

6.       Days’ sales in receivables

 

7.       Gross profit percentage (assume all sales are on credit)