Review this Excel spreadsheet. In the Horizontal worksheet, highlight the cells for the year 2003 that indicate the need for further examination. Then review the Vertical worksheet and calculate the key ratios for each year as appropriate (you will not be able to calculate all ratios for year 2001). Add comments for the ratios that indicate the need for further investigation. Submit your revised spreadsheet file.

Horizontal Analysis 2003 Balance Sheet % Change $ Change 2002 Assets Current Assets Cash Accounts receivable Inventories Notes Receivable Deferred Net Taxes Intangible Assets Total Current Assets Equipment Other Assets Deferred Income Taxes Intangible Assets Total Assets $ 2,388.00 $ 5,592.00 $ 9,434.00 $ 2,681.00 $ 211.00 $ 1,157.00 $ 21,463.00 $ 6,940.00 $ 183.00 $ 222.00 $ 274.00 $ 29,082.00 $ 1,695.00 $ 3,432.00 $ 5,034.00 $ 1,592.00 $ 209.00 $ 971.00 $ 12,933.00 $ 910.00 $ 167.00 $ 126.00 $ 251.00 $ 14,387.00 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Liabilities and Stockholder's Equity Current Liabilities Notes Payable Long-Term Obligations Accounts Payable Income taxes payable Total Current Liabilities Long-Term Obligations Deferred income taxes Total Liabilities Stockholder's Equity Common Stock Additional Paid-in Capital Retained Earnings Total Stockholder's Equity Total Liabilities Stockholder's Equity 1,625.00 136.00 5,862.00 614.00 8,237.00 367.00 242.00 8,846.00 $ 183.00 $ 14,213.00 $ 5,840.00 $ 20,236.00 $ 29,082.00 1,328.00 103.00 3,871.00 591.00 5,893.00 161.00 6,054.00 $ 56.00 $ 7,086.00 $ 1,191.00 $ 8,333.00 $ 14,387.00 Income Statement Sales Cost of Goods Sold Gross Margin General & Administrative Expenses Research & Developmental Costs Income From Operations Net Interest Expense Loss on Sale or Receivables Income Before Taxes Provision for Income Taxes Net Income 2003 % Change $ Change $ 18,848.00 $ 10,598.00 $ 8,250.00 $ 967.00 $ 149.00 $ 7,134.00 $ 217.00 $ $ 6,917.00 $ 2,268.00 $ 4,649.00 2002 $ 12,445.00 $ 6,833.00 $ 5,612.00 $ 3,366.00 $ 1,335.00 $ 911.00 $ 64.00 $ $ 847.00 $ 556.00 $ 291.00 % Change $ Change 2001 $ 453.00 $ 2,094.00 $ 3,266.00 $ 622.00 $ 299.00 $ 552.00 $ 7,286.00 $ 600.00 $ 163.00 $ 34.00 $ 252.00 $ 8,335.00 $ 1,021.00 $ 95.00 $ 2,307.00 $ 86.00 $ 3,509.00 $ 79.00 ### $ 3,588.00 $ 37.00 $ 3,810.00 $ 900.00 $ 4,747.00 $ 8,335.00 % Change $ Change 2001 $ 8,213.00 $ 4,523.00 $ 3,690.00 $ 1,889.00 $ 895.00 $ 906.00 $ 161.00 $ 77.00 $ 668.00 $ 284.00 $ 384.00 Vertical Analysis 2003 Balance Sheet % of Assets Assets Current Assets Cash Accounts receivable Inventories Notes Receivable Deferred Net Taxes Intangible Assets Total Current Assets Equipment Other Assets Deferred Income Taxes Intangible Assets Total Assets $ 2,388.00 $ 5,592.00 $ 9,434.00 $ 2,681.00 $ 211.00 $ 1,157.00 $ 21,463.00 $ 6,940.00 $ 183.00 $ 222.00 $ 274.00 $ 29,082.00 Liabilities and Stockholder's Equity Current Liabilities Notes Payable Long -Term Obligations Accounts Payable Income taxes payable Total Current Liabilities Long -Term Obligations Deferred income taxes Total Liabilities Stockholder's Equity Common Stock Additional Paid-in Capital Retained Earnings Total Stockholder's Equity Total Liabilities Stockholder's Equity Income Statement Sales Cost of Goods Sold Gross Margin General & Administrative Expenses Research & Developmental Costs $ $ $ $ $ $ $ $ 1,625.00 136.00 5,862.00 614.00 8,237.00 367.00 242.00 8,846.00 $ 183.00 $ 14,213.00 $ 5,840.00 $ 20,236.00 $ 29,082.00 2003 % of Income $ 18,848.00 $ 10,598.00 $ 8,250.00 $ 967.00 $ 149.00 Income From Operations Net Interest Expense Loss on Sale or Receivables Income Before Taxes Provision for Income Taxes Net Income $ $ $ $ $ $ 7,134.00 217.00 6,917.00 2,268.00 4,649.00 Analysis 2002 % of Assets 2001 % of Assets $ 1,695.00 $ 3,432.00 $ 5,034.00 $ 1,592.00 $ 209.00 $ 971.00 $ 12,933.00 $ 910.00 $ 167.00 $ 126.00 $ 251.00 $ 14,387.00 $ 453.00 $ 2,094.00 $ 3,266.00 $ 622.00 $ 299.00 $ 552.00 $ 7,286.00 $ 600.00 $ 163.00 $ 34.00 $ 252.00 $ 8,335.00 $ $ $ $ $ $ $ $ 1,328.00 103.00 3,871.00 591.00 5,893.00 161.00 6,054.00 $ 1,021.00 $ 95.00 $ 2,307.00 $ 86.00 $ 3,509.00 $ 79.00 ### $ 3,588.00 $ 56.00 $ 7,086.00 $ 1,191.00 $ 8,333.00 $ 14,387.00 $ 37.00 $ 3,810.00 $ 900.00 $ 4,747.00 $ 8,335.00 2002 % of Income $ 12,445.00 $ 6,833.00 $ 5,612.00 $ 3,366.00 $ 1,335.00 2001 % of Income $ 8,213.00 $ 4,523.00 $ 3,690.00 $ 1,889.00 $ 895.00 $ $ $ $ $ $ 911.00 64.00 847.00 556.00 291.00 $ $ $ $ $ $ 906.00 161.00 77.00 668.00 284.00 384.00 Ratio Analysis Current Ratio Quick Ratio Receivable Turnover Collection Ratio Inventory Turnover Average Days Inventory in Stock Debt-to-Equity Ratio Profit Margin Asset Turnover