Vertical Analysis

For December 31, 2011, the business had current assets of: $1,844 cash, $11,807 accounts receivable, and $9,628 inventor
Current liabilities were: accounts payable $13,446; wages payable $650; and property and taxes payable $4,124. Long-term
$70,959.

2011
Assets
Cash $1,844.00
Account Receivable $ 11,807.00
Inventory $ 9,628.00
Plant & Equipment $ 158,700.00
Total Assets $ 181,979.00

Liabilities
Accounts Payables $ 13,446.00
Wages Payable $ 650.00
Property Tax $ 4,124.00
Long term debt $ 92,800.00
Total Liability $ 111,020.00

Owners' equity
Owners capital $ 70,959.00

Total liabilities & Owners equity $ 181,979.00

Horizontal Analysis
2011
Assets
Cash $ 1,844.00
Account Receivable $ 11,807.00
Inventory $ 9,628.00
Plant & Equipment $ 158,700.00
Total Assets $ 181,979.00
 Liabilities
Accounts Payables $ 13,446.00
Wages Payable $ 650.00
Property Tax $ 4,124.00
Long term debt $ 92,800.00
Total Liability $ 111,020.00

Owners' equity
Owners capital $ 70,959.00
Total liabilities & Owners equity $ 181,979.00

Current Ratio

2011 Current Assets 2010 Current Assets

Cash $ 1,844.00 Cash
Accounts receivable $ 11,807.00 Accounts receivable
Inventory $ 9,628.00 Inventory
Total Assets $ 23,279.00 Total Assets
2011 Current Liabilities 2010 Current Liabilities
Accounts payable $ 13,446.00 Accounts payable
Wages payable $ 650.00 Wages payable
Property & Taxes payable $ 4,124.00 Property & Taxes payable
Total Liabilities $ 18,220.00 Total Liabilities

Current Ratio 1.28 Current Ratio

Total Debt to Total Assets Ratio

2011 2010
 Assets Assets
Cash $ 1,844.00 Cash
Account Receivable $ 11,807.00 Account Receivable
Inventory $ 9,628.00 Inventory
Plant & Equipment $ 158,700.00 Plant & Equipment
Total Assets $ 181,979.00 Total Assets
Liabilities Liabilities
Accounts Payables $ 13,446.00 Accounts Payables
Wages Payable $ 650.00 Wages Payable
Property Tax $ 4,124.00 Property Tax
Long term debt $ 92,800.00 Long term debt
Total Liability $ 111,020.00 Total Liability

Total debt to total assets ratio 0.61 Total debt to total assets ratio

The analysis shows that the debt to asset ratio of 0.61 in year 2011 and compared to 0.52 in year 2010 have a value over 1.
In both years ****** have a total debt to total assets ratio that is within the industry average of 0.05 to 0.75. No, ****
should be concerned because the companys long term debt and total liability increased from 2010 to 2011 is in a good
position financially. However, he might want to pay attention to the total debt to total assets ratio because the number is .61
and can potentially go over the industry average cutoff of 0.75. *** might want to look at increasing inventory turniver to
lower storage and operation costs of equipment to eliminate unnecessary expenses.
 eivable, and $9,628 inventory. Plant and equipment totaled $158,700. For December 31, 2010, the business had current assets of:
es payable $4,124. Long-term debt totaled $92,800 and owners equity $17,417 inventory. Plant and equipment totaled $144,500. C
$9,250; wages payable $1,110; property and taxes payable $3
owners equity $82,33

Percent 2010 Percent

1% $3,278.00 2%
6% $ 6,954.00 4%
5% $ 17,417.00 10%
87% $ 144,500.00 84%
100% $172,149.00 100%

7% $ 9,250.00 5%
0% $ 1,110.00 1%
2% $ 3,650.00 2%
51% $ 75,800.00 44%
61% $ 89,810.00 52%

39% $ 82,339.00 48%

100% $ 172,149.00 100%

Increase/Decrease
2010 Amount Percent

$ 3,278.00 $ (1,434.00) (43.75)

$ 6,954.00 $ 4,853.00 70%
$ 17,417.00 $ (7,789.00) (44.72)
$ 144,500.00 $ 14,200.00 10%
$ 172,149.00 $ 9,830.00 6%
 $ 9,250.00 $ 4,196.00 45%
$ 1,110.00 $ (460.00) (41.44)
$ 3,650.00 $ 474.00 13%
$ 75,800.00 $ 17,000.00 22%
$ 89,810.00 $ 21,210.00 24%

$ 82,339.00 $ (11,380.00) (13.82)

$ 172,149.00 $ 9,830.00 6%

$ 3,278.00
$ 6,954.00
$ 17,417.00
$ 27,649.00

$ 9,250.00
$ 1,110.00
$ 3,650.00
$ 14,010.00

1.97

2010
 $ 3,278.00
$ 6,954.00
$ 17,417.00
$ 144,500.00
$ 172,149.00

$ 9,250.00
$ 1,110.00
$ 3,650.00
$ 75,800.00
$ 89,810.00

0.52

2010 have a value over 1.

f 0.05 to 0.75. No, ****
010 to 2011 is in a good
because the number is .61
ing inventory turniver to
enses.
 business had current assets of: $3,278 cash; $6,954 accounts receivable;
d equipment totaled $144,500. Current liabilities were: accounts payable
0; property and taxes payable $3,650. Long-term debt totaled $75,800; and
owners equity $82,339.
 Balanced Books Bookkeeping

Financial Statement for December 3

Assets Amount Percent

Current assets
Cash $ 4,000.00 10%
Accounts receivable $ 6,000.00 15%
Merchandise Inventory $ 15,000.00 38%
Total current assets $ 25,000.00 63%
Plant and Equipment
Equipment $ 15,000.00 37.5
Total assets $ 40,000.00 100%
Liabilities
Current liabilities
Accounts payable $ 3,500.00 9%
Wages payable $ 1,500.00 4%
Insurance payable $ 500.00 1%
Total liabilities $ 5,500.00 14%
Owner's equity
Carlton, equity $ 34,500.00 86%
Total liabilities and equity $ 40,000.00 100%

Ratio Analysis

Current ratio equals current assets/current liabilities

Current ratio 4.55

Acid test ratio equals quick current assets/current liabilities

Quick Assets
Cash $ 4,000.00
Accounts receivable $ 6,000.00
Total quick assets $ 10,000.00

Current Liabilities $ 5,500.00

Acid Test 1.82

anced Books Bookkeeping

Statement for December 31,2011

Ratio Analysis