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  • Exercise 1

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    rodsiestodomingo
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    The document outlines the requirements for 3 exercises: 1) Compute missing peso amounts and percentages and evaluate a company's short-term financials using horizontal analysis for the first statements. 2) Express asset, liability, and sales amounts in trend percentages using Year 1 as the base year for the second statements. 3) Prepare income statements and statements of financial position in common-size form for 2013 and 2014 for a company where sales increased more than profits, and explain why profits increased only a small amount and if cost-cutting efforts had any benefits for the third statements.

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    The document outlines the requirements for 3 exercises: 1) Compute missing peso amounts and percentages and evaluate a company's short-term financials using horizontal analysis for the first statements. 2) Express asset, liability, and sales amounts in trend percentages using Year 1 as the base year for the second statements. 3) Prepare income statements and statements of financial position in common-size form for 2013 and 2014 for a company where sales increased more than profits, and explain why profits increased only a small amount and if cost-cutting efforts had any benefits for the third statements.

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    5 views3 pages

    Exercise 1

    Uploaded by

    rodsiestodomingo
    The document outlines the requirements for 3 exercises: 1) Compute missing peso amounts and percentages and evaluate a company's short-term financials using horizontal analysis for the first statements. 2) Express asset, liability, and sales amounts in trend percentages using Year 1 as the base year for the second statements. 3) Prepare income statements and statements of financial position in common-size form for 2013 and 2014 for a company where sales increased more than profits, and explain why profits increased only a small amount and if cost-cutting efforts had any benefits for the third statements.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    of 3

    Exercise 1

    Requirements:
    1. Compute the missing changes in peso amounts and percentages in the above statements.
    2. Evaluate the company's short-term financial position, leverage, managerial efficiency and
    profitability using the Horizontal Analysis method.
    Exercise 2

    Requirements:
    1. Express all of the asset, liability, and sales in trend percentages. (Show percentages for each
    item.) Use Year 1 as the base year, and carry computations to one decimal place.
    2. Comment on the result of your analysis.
    Exercise 3

    The president of ValuePlus, Inc., is very concerned. Sales increased by P2.5 million during 2014, yet the
    company's net income increased by only P105,000. Also, the company's operating expenses went up in 2014,
    even though a major effort was launched during the year to cut costs.
    Requirements:
    1. For both 2013 and 2014, prepare the income statement and the statement of financial position in common-
    size form. (Round computations to one decimal place.)
    2. From your work in (l) above, explain to the president why the increase in profits was so small in 2014.
    Were any benefits realized from the company's cost-cutting efforts? Explain

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