accounting vertical analysis and inventory turnover questions

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1) Vertical analysis (common size) percentages for Kochheim Company’s sales, cost of goods sold, and expenses are shown below.

Vertical Analysis

2015

2014

2013

Sales 100.0 100.0 100.0
Cost of goods sold 60.2 62.4 63.5
Expenses 25.0 25.6 27.5

(a) Calculate net income for 2015, 2014, & 2013.

2) The following data are taken from the financial statements of Rainsberger Company.

2015

2014

Accounts receivable (net), end of year $550,000 $520,000
Net sales on account 3,960,000 3,100,000
Terms for all sales are 1/10, n/60.

Compute for each year the accounts receivable turnover. At the end of 2013, accounts receivable (net) was $480,000.(Round answers to 1 decimal place, e.g. 1.6.)

3) Schellhammer Corporation reported the following amounts in 2013, 2014, and 2015.

2013

2014

2015

Current assets $200,000 $210,000 $240,000
Current liabilities $150,000 $168,000 $184,000
Total assets $500,000 $600,000 $620,000


(b)

Perform each of the three types of analysis on Schellhammer’s current assets. (Round percentages to 0 decimal places, e.g. 43% and ratios to 2 decimal places, e.g.1.58.)

2013

2014

2015

Horizontal Analysis
Current assets         %  % %
Vertical Analysis
Current assets %  % %
Ratio Analysis
Current ratio

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