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CBI Incorporated management is concerned about its financial performance over the past few years and has provided the following information (assume all sales are on credit and a 365 day year).

	2012	2011	2010
Statement of Financial Position	$	$	$
Accounts receivable	500	300	197
Inventory	1,852	1,540	1,278
Total current assets	7,113	4,938	4,112
Total assets	36,322	27,075	24,161
Current liabilities	2,489	1,773	1,844
Total liabilities	16,000	11,528	8,707
Owners Equity	20,322	15,547	15,454
Income Statement
Net Sales	12,924	8,136	7,613
Cost of goods sold	4,201	3,807	3,706
Operating expenses	1,958	2,350	2,507
Interest Expense	121	57	21
Income tax expense	1,370	648	594
Profit (loss)	5,274	1,274	785

	Competitor A	Competitor B
Gross profit margin	50%	45%
Debt / equity	45%	50%
Return on Assets	5%	10%
Inventory turnover	2 times	2.5 times
Operating profit margin	20%	25%
Current ratio	2.5	2.5

Required:

Using information in the above tables:

1. Conduct a horizontal analysis on any four balance sheet items and any four income statement items for two years (2011 and 2012; 8 calculations). (4 marks)
2. Conduct a vertical analysis for two years (2011 and 2012; 8 calculations) on any four balance sheet items and four income statement items. (4 marks)
3. Calculate any four ratios below and comment on the companys financial performance/position versus either Competitor A or Competitor B. (8 marks)

Note: No extra marks are given for completion of all ratios.

Ratio	Formula
Current Ratio	Current Assets/Current Liabilities
Quick Ratio	Cash, Marketable Securities and Accounts Receievable/Current Liabilities
Receivable Turnover	Net Sales/Average Trade receivables
Inventory Turnover	Cost of Goods Sold/Average Inventory
Asset Turnover	Net Sales/Average total assets
Gross Profit Margin	Gross Profit/Net Sales
Profit Margin on Sales	Net Income/Net Sales
Rate of Return on Assets	Net Income/Average Total Assets
Debt to Total Assets Ratio	Total Debt/Total Assets
Debt to Equity	Total Liabilities/Shareholder Equity
Times Interest Earned	Income before interest and Taxes/Interest Charges

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