Unit 3.1 Financial Statement Analysis and Ratios
If a company has total sales of $46,000 in 2023 and total sales of $9,000 in 2022, how would an analyst calculate the horizontal analysis in dollars? - $46,000 − $9,000
If a company has total inventory of $83,000 in 2023 and total inventory of ...
Unit 3.1 Financial Statement Analysis and Ratios
If a company has total sales of $46,000 in 2023 and total sales of $9,000 in 2022, how would an analyst
calculate the horizontal analysis in dollars? - $46,000 − $9,000
If a company has total inventory of $83,000 in 2023 and total inventory of $80,000 in 2022, how would
an analyst calculate the horizontal analysis as a percentage? - ($83,000 − $80,000)/$80,000 x 100
The formula used to calculate the horizontal analysis of inventory as a percentage is the current year's
inventory value minus the prior year's inventory value, divided by the prior year's inventory value, times
100—specifically, $83,000 − $80,000/$80,000 times 100.
If a company has total sales of $15,000 and the cost of sales is $3,000, how would an analyst calculate
the vertical analysis of cost of sales as a percentage of total sales? - ($3,000/$15,000) x 100
The formula used to calculate the vertical analysis of the cost of sales as a percentage of the total sales is
to divide the cost of sales $3,000 by the total sales $15,000 times 100.
Calculate working capital if a company has $852,000 in current assets, $916,000 in total assets, $705,000
in current liabilities, and $878,000 in total liabilities. - 147,000
Working capital = Current assets - Current liabilities
Calculate the current ratio if a company has $29,000 in current assets, $40,000 in total assets, $12,000 in
current liabilities, and $19,000 in total liabilities. - 2.42
Current ratio = Current assets divided by current liabilities
Calculate the quick ratio if a company has $72,000 in quick assets composed of cash and accounts
receivables and $59,000 in current liabilities. - 1.22
quick ratio (acid test ratio) = Quick assets divided by current liabilities.
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