Topic: Analysis of Financial Statements

Instructions: Please do the exercises in Excel format.

Exercise 1

Here is financial information for Valdez Express Inc.

December 31, 2023 December 31, 2022

Current assets $114,000 $80,000

Plant assets (net) 414,000 360,000

Current liabilities 91,000 65,000

Long-term liabilities 134,500 90,000

Common stock, $1 par 149,500 115,000

Retained earnings 153,000 170,000

Instructions

Prepare a schedule showing a horizontal analysis for 2023 using 2022 as the base year.

Exercise 2

Operating data for Panola Land Corporation are presented below

2022 2021

Sales revenue $800,000 $600,000

Cost of goods sold 480,000 390,000

Selling expenses 120,000 78,000

Administrative expenses 80,000 54,000

Income tax expense 24,000 25,000

Net income 96,000 53,000

Instructions

Prepare a schedule showing a vertical analysis for 2022 and 2021.

Exercise 3

Match the ratios with their formulas by entering the appropriate letter in the space provided.

A.Current ratio

B Inventory turnover

C. Average collection period

D Days in inventory

____ 1.	Cost of goods sold
	Average inventory
____ 2.	Current assets
	Current liabilities
____ 3	365 days
	Accounts receivable turnover
____ 4.	365 days
	Inventory turnover