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Again, use the what and whyformatas explained in Section One;tell me whatthe numbers say and why it is important.Answer questions such as what areas do the numbers show are of concern, what changes should the CEO make or look into, etc. As in any analysis, you can also discuss what is good and is therefore probably not a concern to the CEO. Use your textbook to help you develop your analysis so that it is meaningful.

To demonstrate your knowledge of Horizontal Analysis and Vertical Analysis, I am giving you a problem from the Spiceland textbook but not to worry, I am also giving you the solutions (highlighted in red font). My focus here is for you to do just the analysis. My thinking on this one is that the computer will spit out the calculation but you need to be able to interpret the results. Please realize that I am not asking you to do all the work shown below; it is already done for you thereby significantly reducing the amount of work you need to do for this section. Increase (Decrease) Amount % Balance Sheets - Horizontal Analysis 12/31/18 Year 2018 2017 Assets Current assets: Cash $208,000 $262,200 Accounts receivable 856,000 999,400 Inventory 1,900,000 1,349,000 Supplies 124,000 87,400 Long-term assets: Equipment 1,292,000 1,292,000 Less: Accumulated depreciation -380,000 -190,000 Total assets $4,000,000 $3,800,000 Liabilities and Stockholders' Equity ($54,200) -143,400 551,000 36,600 -20.7 -14.3 40.8 41.9 -190,000 200,000 -100 5.3

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