Question

The financial statements for Lynch Shoes Inc. follow:
LIABILITIES AND STOCKHOLDERS’ EQUITY

Required:
1. Prepare common size income statements to be used for horizontal analysis for Lynch for 2009 to 2011 (in percentage terms, rounded to two decimal places). You do not need to include the actual dollar amounts shown above.
2. Indicate why Lynch’s net income increased between 2009 and 2011.
3. Prepare common size balance sheets to be used for vertical analysis for 2011 and 2010 (in percentage terms, rounded to two decimal places). You do not need to include the actual dollar amounts shown above.
4. Indicate whether the proportion of dollars invested in the various categories of assets has changed significantly between 2010 and 2011.
5. Indicate whether the proportion of capital raised from the various liability categories and common stockholders’ equity has changed significantly between 2010 and 2011.
6. Describe Lynch’s performance and financial position.


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  • CreatedSeptember 22, 2015
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