Scenario

As a controller at A$+$ Corporation, you have tasked a new staff accountant with completing vertical and horizontal analysis reports. While reviewing the completed reports, you notice errors. To help your new staff member, you will provide written feedback to identify the errors and explain how to resolve them.

This activity will ensure that, as a controller, you can accurately perform vertical and horizontal ratio analysis.

Directions

Using the Module Two Analysis Activity Financial Statements and Analysis workbook provided in the What to Submit section below, identify the error in each analysis. Explain how to resolve each error on the Explanations tab. Address each error in one to two sentences.

Specifically, you must address the following rubric criteria:

Part One

Identify the vertical analysis error in the income statement.

Explain how to resolve the vertical analysis error in the income statement.

Identify the vertical analysis error in the balance sheet.

Explain how to resolve the vertical analysis error in the balance sheet.

Part Two

Identify the horizontal analysis error in the income statement.

Explain how to resolve the horizontal analysis error in the income statement.

Identify the horizontal analysis error in the balance sheet.

Explain how to resolve the horizontal analysis error in the balance sheet.