Question 1:Prepare a horizontal analysis of the following comparative income statement for WestwindCorporation. Round percentage changes to the nearest onetenth percent.Westwind CorporationComparative Income StatementFor the Years Ended December 31, 2016 and 201520162015Total revenue$1,400,000$1,250,000Cost of goods sold925,000$830,000Operating expenses313,000280,000Interest expense14,00012,000Income tax expense48,30038,000$1,300,300$1,160,000$99,700$90,000Expenses:Total expensesNet IncomeQuestion 2:Compute trend percentages for Flash Corporation total revenue and net income for the followingfiveyear period, using year 0 as the base year. Round to the nearest full percent.(in thousands)Year 4Total revenueNet incomeYear 3Year 2Year 1Year 0$1,418$1,287$1,106$1,009$1,043125104938185Question 3:Use the following data to prepare a commonsize comparative income statement for Old MillCorporation on December 31, 2016. Round percentages to onetenth percent.Net salesExpenses:20162015$1,400,000$1,200,000 Cost of goods sold$900,000$780,000250,000220,000Interest expense55,00052,000Income tax expense64,00048,000$1,269,000$1,100,000$131,000$100,000Selling and general expensesTotal expensesNet incomeQuestion 4:Comparative financial statement data of Lannister Inc. are as follows:Lannister Inc.Comparative Income StatementYears Ended December 31, 2016 and 20152016Net sales2015$687,000$595,000Cost of goods sold375,000276,000Gross profit312,000319,000Operating expenses129,000142,000Income from operations183,000177,00037,00045,000146,000132,00036,00051,000$110,000$81,000Interest expenseIncome before income taxIncome tax expenseNet incomeLannister Inc.Comparative Balance SheetDecember 31, 2016 and 2015201620152014Current assets:Cash$45,000$49,000Current receivables, net212,000158,000$200,000Inventories297,000281,000181,0004,00029,000Total current assets558,000517,000Property, plant and equipment, net285,000277,000$843,000$794,000$700,000Accounts payable150,000105,000112,000Other current liabilities135,000188,000Total current liabilities$285,000$293,000Longterm liabilities243,000231,000Total liabilities528,000524,000Common shareholders’ equity, no par315,000270,000199,000$843,000$794,000Prepaid expensesTotal assetsTotal liabilities and shareholders’ equityOther information:1.Market price of Lannister common stock: $102.17 at December 31, 2016; and $77.01 atDecember 31, 2015.2.Common shares outstanding: 18,000 during 2016 and 17,500 during 2015.3.All sales on credit.Requirements:1.Compute the following ratios for 2016 and 2015a.Current ratiob.Quick ratio (acid test)c.Receivables turnover and days’ sales outstanding (rounded to the nearest wholeday)d.Inventory turnover and days inventory outstanding (rounded to the nearest wholeday)e.2.Accounts payable turnover and days’ payable outstanding (rounded to thenearest whole day).f.Cash conversion cycle (in days)g.Timesinterestearned ratioh.Return on assets (use DuPont analysis)i.Return on common shareholders’ equity (use DuPont analysis)j.Earnings per share of common stockk.Price/earnings ratio.Decide whether (a) Lannister’s financial position improved or deteriorated during 2014and (b) the investment attractiveness of Lannister’s common stock appears to haveincreased or decreased.
Question 1:Prepare a horizontal analysis of the following comparative income statement for WestwindCorporation. Round percentage changes to the nearest onetenth percent.Westwind CorporationComparative Income StatementFor the Years Ended December 31, 2016 and 201520162015Total revenue$1,400,000$1,250,000Cost of goods sold925,000$830,000Operating expenses313,000280,000Interest expense14,00012,000Income tax expense48,30038,000$1,300,300$1,160,000$99,700$90,000Expenses:Total expensesNet IncomeQuestion 2:Compute trend percentages for Flash Corporation total revenue and net income for the followingfiveyear period, using year 0 as the base year. Round to the nearest full percent.(in thousands)Year 4Total revenueNet incomeYear 3Year 2Year 1Year 0$1,418$1,287$1,106$1,009$1,043125104938185Question 3:Use the following data to prepare a commonsize comparative income statement for Old MillCorporation on December 31, 2016. Round percentages to onetenth percent.Net salesExpenses:20162015$1,400,000$1,200,000 Cost of goods sold$900,000$780,000250,000220,000Interest expense55,00052,000Income tax expense64,00048,000$1,269,000$1,100,000$131,000$100,000Selling and general expensesTotal expensesNet incomeQuestion 4:Comparative financial statement data of Lannister Inc. are as follows:Lannister Inc.Comparative Income StatementYears Ended December 31, 2016 and 20152016Net sales2015$687,000$595,000Cost of goods sold375,000276,000Gross profit312,000319,000Operating expenses129,000142,000Income from operations183,000177,00037,00045,000146,000132,00036,00051,000$110,000$81,000Interest expenseIncome before income taxIncome tax expenseNet incomeLannister Inc.Comparative Balance SheetDecember 31, 2016 and 2015201620152014Current assets:Cash$45,000$49,000Current receivables, net212,000158,000$200,000Inventories297,000281,000181,0004,00029,000Total current assets558,000517,000Property, plant and equipment, net285,000277,000$843,000$794,000$700,000Accounts payable150,000105,000112,000Other current liabilities135,000188,000Total current liabilities$285,000$293,000Longterm liabilities243,000231,000Total liabilities528,000524,000Common shareholders’ equity, no par315,000270,000199,000$843,000$794,000Prepaid expensesTotal assetsTotal liabilities and shareholders’ equityOther information:1.Market price of Lannister common stock: $102.17 at December 31, 2016; and $77.01 atDecember 31, 2015.2.Common shares outstanding: 18,000 during 2016 and 17,500 during 2015.3.All sales on credit.Requirements:1.Compute the following ratios for 2016 and 2015a.Current ratiob.Quick ratio (acid test)c.Receivables turnover and days’ sales outstanding (rounded to the nearest wholeday)d.Inventory turnover and days inventory outstanding (rounded to the nearest wholeday)e.2.Accounts payable turnover and days’ payable outstanding (rounded to thenearest whole day).f.Cash conversion cycle (in days)g.Timesinterestearned ratioh.Return on assets (use DuPont analysis)i.Return on common shareholders’ equity (use DuPont analysis)j.Earnings per share of common stockk.Price/earnings ratio.Decide whether (a) Lannister’s financial position improved or deteriorated during 2014and (b) the investment attractiveness of Lannister’s common stock appears to haveincreased or decreased.
Question 1:Prepare a horizontal analysis of the following comparative income statement for WestwindCorporation. Round percentage changes to the nearest onetenth percent.Westwind CorporationComparative Income StatementFor the Years Ended December 31, 2016 and 201520162015Total revenue$1,400,000$1,250,000Cost of goods sold925,000$830,000Operating expenses313,000280,000Interest expense14,00012,000Income tax expense48,30038,000$1,300,300$1,160,000$99,700$90,000Expenses:Total expensesNet IncomeQuestion 2:Compute trend percentages for Flash Corporation total revenue and net income for the followingfiveyear period, using year 0 as the base year. Round to the nearest full percent.(in thousands)Year 4Total revenueNet incomeYear 3Year 2Year 1Year 0$1,418$1,287$1,106$1,009$1,043125104938185Question 3:Use the following data to prepare a commonsize comparative income statement for Old MillCorporation on December 31, 2016. Round percentages to onetenth percent.Net salesExpenses:20162015$1,400,000$1,200,000 Cost of goods sold$900,000$780,000250,000220,000Interest expense55,00052,000Income tax expense64,00048,000$1,269,000$1,100,000$131,000$100,000Selling and general expensesTotal expensesNet incomeQuestion 4:Comparative financial statement data of Lannister Inc. are as follows:Lannister Inc.Comparative Income StatementYears Ended December 31, 2016 and 20152016Net sales2015$687,000$595,000Cost of goods sold375,000276,000Gross profit312,000319,000Operating expenses129,000142,000Income from operations183,000177,00037,00045,000146,000132,00036,00051,000$110,000$81,000Interest expenseIncome before income taxIncome tax expenseNet incomeLannister Inc.Comparative Balance SheetDecember 31, 2016 and 2015201620152014Current assets:Cash$45,000$49,000Current receivables, net212,000158,000$200,000Inventories297,000281,000181,0004,00029,000Total current assets558,000517,000Property, plant and equipment, net285,000277,000$843,000$794,000$700,000Accounts payable150,000105,000112,000Other current liabilities135,000188,000Total current liabilities$285,000$293,000Longterm liabilities243,000231,000Total liabilities528,000524,000Common shareholders’ equity, no par315,000270,000199,000$843,000$794,000Prepaid expensesTotal assetsTotal liabilities and shareholders’ equityOther information:1.Market price of Lannister common stock: $102.17 at December 31, 2016; and $77.01 atDecember 31, 2015.2.Common shares outstanding: 18,000 during 2016 and 17,500 during 2015.3.All sales on credit.Requirements:1.Compute the following ratios for 2016 and 2015a.Current ratiob.Quick ratio (acid test)c.Receivables turnover and days’ sales outstanding (rounded to the nearest wholeday)d.Inventory turnover and days inventory outstanding (rounded to the nearest wholeday)e.2.Accounts payable turnover and days’ payable outstanding (rounded to thenearest whole day).f.Cash conversion cycle (in days)g.Timesinterestearned ratioh.Return on assets (use DuPont analysis)i.Return on common shareholders’ equity (use DuPont analysis)j.Earnings per share of common stockk.Price/earnings ratio.Decide whether (a) Lannister’s financial position improved or deteriorated during 2014and (b) the investment attractiveness of Lannister’s common stock appears to haveincreased or decreased.
Question 1:Prepare a horizontal analysis of the following comparative income statement for WestwindCorporation. Round percentage changes to the nearest onetenth percent.Westwind CorporationComparative Income StatementFor the Years Ended December 31, 2016 and 201520162015Total revenue$1,400,000$1,250,000Cost of goods sold925,000$830,000Operating expenses313,000280,000Interest expense14,00012,000Income tax expense48,30038,000$1,300,300$1,160,000$99,700$90,000Expenses:Total expensesNet IncomeQuestion 2:Compute trend percentages for Flash Corporation total revenue and net income for the followingfiveyear period, using year 0 as the base year. Round to the nearest full percent.(in thousands)Year 4Total revenueNet incomeYear 3Year 2Year 1Year 0$1,418$1,287$1,106$1,009$1,043125104938185Question 3:Use the following data to prepare a commonsize comparative income statement for Old MillCorporation on December 31, 2016. Round percentages to onetenth percent.Net salesExpenses:20162015$1,400,000$1,200,000 Cost of goods sold$900,000$780,000250,000220,000Interest expense55,00052,000Income tax expense64,00048,000$1,269,000$1,100,000$131,000$100,000Selling and general expensesTotal expensesNet incomeQuestion 4:Comparative financial statement data of Lannister Inc. are as follows:Lannister Inc.Comparative Income StatementYears Ended December 31, 2016 and 20152016Net sales2015$687,000$595,000Cost of goods sold375,000276,000Gross profit312,000319,000Operating expenses129,000142,000Income from operations183,000177,00037,00045,000146,000132,00036,00051,000$110,000$81,000Interest expenseIncome before income taxIncome tax expenseNet incomeLannister Inc.Comparative Balance SheetDecember 31, 2016 and 2015201620152014Current assets:Cash$45,000$49,000Current receivables, net212,000158,000$200,000Inventories297,000281,000181,0004,00029,000Total current assets558,000517,000Property, plant and equipment, net285,000277,000$843,000$794,000$700,000Accounts payable150,000105,000112,000Other current liabilities135,000188,000Total current liabilities$285,000$293,000Longterm liabilities243,000231,000Total liabilities528,000524,000Common shareholders’ equity, no par315,000270,000199,000$843,000$794,000Prepaid expensesTotal assetsTotal liabilities and shareholders’ equityOther information:1.Market price of Lannister common stock: $102.17 at December 31, 2016; and $77.01 atDecember 31, 2015.2.Common shares outstanding: 18,000 during 2016 and 17,500 during 2015.3.All sales on credit.Requirements:1.Compute the following ratios for 2016 and 2015a.Current ratiob.Quick ratio (acid test)c.Receivables turnover and days’ sales outstanding (rounded to the nearest wholeday)d.Inventory turnover and days inventory outstanding (rounded to the nearest wholeday)e.2.Accounts payable turnover and days’ payable outstanding (rounded to thenearest whole day).f.Cash conversion cycle (in days)g.Timesinterestearned ratioh.Return on assets (use DuPont analysis)i.Return on common shareholders’ equity (use DuPont analysis)j.Earnings per share of common stockk.Price/earnings ratio.Decide whether (a) Lannister’s financial position improved or deteriorated during 2014and (b) the investment attractiveness of Lannister’s common stock appears to haveincreased or decreased.
