Bram Inc. is a family-owned company that reports using ASPE. It has a 30 June year-end. Bram has one primary and one secondary source of revenue. The company has never acquired another company, nor been acquired. It plans to increase volume of sales in the next few years.
The three-year comparative balance sheet for Bram Inc. is presented below.

Required:
1. Explain what a horizontal percentage analysis is, how a horizontal percentage analysis of the comparative SFP could be useful for a user, and what its limitations are.
2. Explain whether a horizontal percentage analysis might be appropriate for Bram Inc.
3. Prepare a horizontal percentage analysis of the comparative SFP. Round to the nearest percent.
4. What observations can you make about the changes noted in your horizontal percentage analysis for the period between 20X7 and 20X9?

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Cash Marketable securities Accounts receivables, net Inventory Property, plant, and equipment, net Intangible assets Total assets Accounts payable and accrued liabilities Shareholder loan payable Bank loan payable Common shares Retained earnings Total liabilities and shareholders' equity $ 20X9 14,000 50,000 37,000 60,000 2,900,000 200,000 3,261,000 45,000 600,000 2,500,000 1,000,000 (884,000) 3,261,000 BRAM INC. Balance Sheet June 30 20X8 $ 20,000 100,000 32,000 74,000 2,100,000 200,000 2,526,000 50,000 300,000 2,250,000 500,000 (574,000) 2,526,000 20X7 $ 88,000 400,000 29,000 90,000 925,000 200,000 1,732,000 55,000 25,000 2,000,000 500,000 (848,000) 1,732,000