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I Practice of Horizontal & Verticle Analysis Activity I
I Practice of Horizontal & Verticle Analysis Activity I
Activity I
Question # 1: The following data are adapted from a recent annual report of Pak Suzuki.
Income Statement
Sales 40,00,000 100% 43,00,000 107.5% 38,00,000
Cost of goods sold 32,00,000 80% 36,00,000 112.5% 33,00,000
Net profit 3,00,000 7.5% 2,00,000 66.67% 1,00,000
Required:
1. Analyze the company’s financial condition and performance over the last three years by
using the vertical analysis. Also identify the problems if any.
2. From the information above prepare horizontal analysis. Analyze the company’s financial
condition and performance over the last three years by taking 2014 as base year. Also
identify the problems if any.
Question # 2:
Income statements of A Limited for the years ended December 31 2004 to 2008 are given below.
Required:
1. Examine the trend of the business activities of the company on the basis of vertical
analysis.
2. Examine the trend of the business activities of the company by performing horizontal
analysis over the years by considering 2004 as base year.
Question # 3:
From the condensed balance sheets as on December 31 and income statements for the years
ended December 31 2003-2008 of M corporation.
Condensed comparative balance sheets as on December 31 (Rs. in millions)
2003 2004 2005 2006 2007 2008
Assets
Current assets
Inventory 122 146 170 242 308 366
Receivables 130 134 144 270 320 340
Cash 36 50 66 38 34 38
Total current assets 288 330 380 550 662 744
Non current assets 304 310 312 620 650 600
Total assets 592 640 692 1,170 1,312 1,344