Assignment #$3$: Financial Statement Analysis $[20\%]$ This assignment relates to the following Course Learning Requirements:$$ CLR $1$: Demonstrate the competencies required in the professional workplace. CLR $3$: Complete authentic accounting related tasks similar to those that one would experience in a typical business. CLR $4$: Determine which government regulations apply to different businesses. $$ Objective of this Assignment:$$ In this assignment, students will demonstrate the financial statement analysis skills. Pre$-$Assignment Instructions: $1.$ To prepare you for this assignment, read the module $3$ content, review all additional resources provided and complete the learning activity $3\mathrm{.}1.2.$ Download the attached Excel file titled Assignment Tasks: The tasks outlined below are to be completed based on the information provided in the attached excel file. $1.$ Perform a Horizontal analysis for the year $2021$ to year $2024$ Income Statement and Balance sheet. $2.$ Perform a Vertical analysis $($common size statements$)$ for the year $2021$ to year $2024$ Income Statement and Balance sheet. $$ Always consider the first year as the base year for the horizontal analysis. $3.$ Provide your observations on the trends of the business, based on your horizontal and vertical analysis. $4.$ Assess the business$$ liquidity by using a minimum of two liquidity ratios. $$ Is the company's position improving or deteriorating? Explain your answer. $5.$ Assess the business$$ profitability by using a minimum of three profitability ratios. $$ Is the company's position improving or deteriorating? Explain your answer. $6.$ Based on the above analysis $($horizontal$,$ vertical, and ratios$),$ write a brief financial summary of the business, and explain any observed risks$/$weaknesses for the business. $$ Assignment Submission: $$ Your assignment is to be submitted in EXCEL format. It should be submitted with the following guidelines: o$$ Include a cover page with the course code and course name, the assignment number, the title of your assignment, your student ID$,$ your name, the instructor$$s name, and the date the assignment is created. o$$ Ensure the first page of your assignment has the title at the top of the page and the sections of your report have headings and subheadings to chunk your assignment into sections for each of the topics you are writing about. o$$ Font should be Arial $12$ or Calibri $12.$ Text must be double spaced but table may be single spaced. o$$ You must cite all your sources of information using APA formatting.$$

Patel's Fabrics Ltd$.$ Comparative Income Statements $2021$ $ $2021\%2022$ $ $2022\%2023$ $ $2023\%2024$ $ $2024\%$ Sales $509,235599,100538,900508,100$ COGS $247,350291,000259,200234,300$ Gross margin $261,885308,100279,700273,800$ Operating expenses $90,270106,200104,600104,100$ Operating income $171,615201,900175,100169,700$ Interest expense $9,52011,20010,50011,900$ Income before taxes $162,095190,700164,600157,800$ Income taxes $(40\%)64,83876,28065,84063,120$ Net income $97,257114,42098,76094,680$ Patel's Fabrics Ltd$.$ Comparative Balance Sheets $2021$ $ $2021\%2022$ $ $2022\%2023$ $ $2023\%2024$ $ $2024\%$ Assets $$ Cash $28,00032,00025,80020,500$ A$/$R $($net$)85,000126,860127,00094,300$ Inventory $40,00060,00080,70056,000$ Prepaid expenses $8,00011,00010,0004,600$ Total current assets $161,000229,860243,500175,400$ Capital assets $($net$)675,000668,900576,000540,300$ Total assets $836,000898,760819,500715,700$ Liabilities & Shareholders' Equity $$ Accounts payable $74,78053,12081,20079,100$ Accrued expenses $17,00011,00012,24041,700$ Total current liabilities $91,78064,12093,440120,800$ Long$-$term debt $194,000170,000160,000150,000$ Total liabilities $285,780234,120253,440270,800$ Common stock $($$$0\mathrm{.}50$ par value$)6,0006,0006,0005,000$ Additional paid in capital $99,00099,00099,00062,000$ Retained earnings $445,220559,640461,060377,900$ Total equity $550,220664,640566,06044 Step by Step Solution There are 3 Steps involved in it 1 Expert Approved Answer Step: 1 Unlock Question Has Been Solved by an Expert! 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