Rachel owns a franchise restaurant, which is part of a large restaurant chain in New England....

 

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Rachel owns a franchise restaurant, which is part of a large restaurant chain in New England. Help her calculate a vertical analysis of her balance sheet. Rachel's Restaurant Balance Sheet December 31 This Year ASSETS Current Assets Cash Marketable Securities Net Receivables. Inventories Total Current Assets Investments Property and Equipment Land Building Furnishings and Equipment Less Accumulated Depreciation Total Property and Equipment-Net $ 57,317 130,769 80,000 34,545 248,837 206,053 418,665 205,556 135,429 % Other Assets Total Assets LIABILITIES AND OWNERS' EQUITY Carrent Liabilities Accounts Payable Notes Payable Other Current Liabilities Total Current Liabilities Long-Term Liabilities Long-Term Debt Total Liabilities Owners' Equity Common Stock Paid in Capital Retained Earnings Total Owners' Equity TOTAL LIABILITIES AND OWNERS' EQUITY 15,814 Inventories Accounts Payable Notes Payable 142,439 31,905 147,907 218,272 78,947 324,324 318,333 Rachel has been given by her regional franchise services director manager some balance sheet percentage averages for chain-operated units. Select percentages of the chain-operated units are given as follows: Select Chain Percentages (Vertical Analysis) Cash 6.70% 1.30% 10.50% 1.10% & Compare Rachel's cash % with the chain units' %. Is it higher or lower? What does this mean? b. Compare Rachel's inventories % with the chain units' %. Is it higher or lower? What does this mean? c. Compare Rachel's accounts payable % with the chain units' %. Is it higher or lower? What does this mean? d. Compare Rachel's notes payable % with the chain units' %. Is it higher or lower? What does this mean? Rachel owns a franchise restaurant, which is part of a large restaurant chain in New England. Help her calculate a vertical analysis of her balance sheet. Rachel's Restaurant Balance Sheet December 31 This Year ASSETS Current Assets Cash Marketable Securities Net Receivables. Inventories Total Current Assets Investments Property and Equipment Land Building Furnishings and Equipment Less Accumulated Depreciation Total Property and Equipment-Net $ 57,317 130,769 80,000 34,545 248,837 206,053 418,665 205,556 135,429 % Other Assets Total Assets LIABILITIES AND OWNERS' EQUITY Carrent Liabilities Accounts Payable Notes Payable Other Current Liabilities Total Current Liabilities Long-Term Liabilities Long-Term Debt Total Liabilities Owners' Equity Common Stock Paid in Capital Retained Earnings Total Owners' Equity TOTAL LIABILITIES AND OWNERS' EQUITY 15,814 Inventories Accounts Payable Notes Payable 142,439 31,905 147,907 218,272 78,947 324,324 318,333 Rachel has been given by her regional franchise services director manager some balance sheet percentage averages for chain-operated units. Select percentages of the chain-operated units are given as follows: Select Chain Percentages (Vertical Analysis) Cash 6.70% 1.30% 10.50% 1.10% & Compare Rachel's cash % with the chain units' %. Is it higher or lower? What does this mean? b. Compare Rachel's inventories % with the chain units' %. Is it higher or lower? What does this mean? c. Compare Rachel's accounts payable % with the chain units' %. Is it higher or lower? What does this mean? d. Compare Rachel's notes payable % with the chain units' %. Is it higher or lower? What does this mean?

Answer rating: 100% (QA)

To calculate the vertical analysis we need to determine the percentage of each item on Rachels balance sheet relative to the total assets or liabilities as appropriate Lets calculate the percentages f... View the full answer