Essay about Comprehensive Financial Statement Analysis

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Words: 958
Pages: 4
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Comprehensive Financial Statement Analysis Problem

A) Horizontal Balance Sheet

(Horizontal)
Mandrake Motorcycles

Balance Sheets

(In thousands)
December 31, 2015
December 31, 2014
Change
Percent Change Assets

Current Assets:

Cash and cash equivalents
$240,000
$425,000
-$185,000
-43.5% Accounts receivable
$185,000
$200,000
-$15,000
-7.5% Inventory
$850,000
$630,000
$220,000
34.9% Other current assets
$200,000
$210,000
-$10,000
-4.8% Total current assets
$1,475,000
$1,465,000
$10,000
0.7% Property, plant, and equipment, net
$1,075,000
$1,175,000
-$100,000
-8.5% Total assets
$2,550,000
$2,640,000
-$90,000
-3.4%

Liabilities and Stockholders' Equity

Current Liabilities:

Accounts payable
$260,000
$205,000
$55,000
26.8% Short-term debt payable
$370,000
$320,000
$50,000
15.6% Other current liabilities
$285,000
$280,000
$5,000
1.8% Total current liabilities
$915,000
$805,000
$110,000
13.7% Long-term debt
$195,000
$410,000
-$215,000
-52.4% Total liabilities
$110,000
$1,215,000
-$1,105,000
-90.9% Stockholders' equity:

Common Stock
$1,325,000
$1,325,000
$0
0.0% Retained Earnings
$115,000
$100,000
$15,000
15.0% Total Stockholders' equity
$1,440,000
$1,425,000
$15,000
1.1% Total liabilities and Stockholders' equity
$2,550,000
$2,640,000
-$90,000
-3.4%

Vertical Balance Sheet
(Vertical)
Mandrake Motorcycles

Balance Sheets

(In thousands)
December 31, 2015
December 31, 2014
Assets

Current Assets:

Cash and cash equivalents
$240,000
9.4%
$425,000
16.1%
Accounts receivable
$185,000
7.3%
$200,000
7.6%
Inventory
$850,000
33.3%
$630,000
23.9%
Other current assets
$200,000
7.8%
$210,000
8.0%
Total current assets
$1,475,000
57.8%
$1,465,000
55.5%
Property, plant, and equipment, net
$1,075,000
42.2%
$1,175,000
44.5%
Total assets
$2,550,000
100.0%
$2,640,000
100.0%

Liabilities and Stockholders' Equity

Current Liabilities:

Accounts payable
$260,000
10.2%
$205,000
7.8%
Short-term debt payable
$370,000
14.5%
$320,000
12.1%
Other current liabilities
$285,000
11.2%
$280,000
10.6%
Total current liabilities
$915,000
35.9%
$805,000
30.5%
Long-term debt
$195,000
7.6%
$410,000
15.5%
Total liabilities
$110,000
4.3%
$1,215,000
46.0%
Stockholders' equity:

Common Stock
$1,325,000
52.0%
$1,325,000
50.2%
Retained Earnings
$115,000
4.5%
$100,000
3.8%
Total Stockholders' equity
$1,440,000
56.5%
$1,425,000
54.0%
Total liabilities and Stockholders' equity
$2,550,000
100.0%
$2,640,000
100.0%

Horizontal Income Statement (Horizontal)
Mandrake Motorcycles

Income Statements

Year Ended
Year Ended

December 31, 2015
December 31, 2014
Change
Percent Change Net Sales
$1,590,000
$1,690,000
-$100,000
-5.9% Cost of goods sold
$980,000
$1,175,000
-$195,000
-16.6% Gross margin
$610,000
$515,000
$95,000
18.4% Operating expenses:

Selling expenses
$300,000
$210,000
$90,000
42.9% General and administrative expenses
$210,000
$200,000
$10,000
5.0% Total Operating Expenses
$510,000
$410,000
$100,000
24.4% Operating income
$100,000
$105,000
-$5,000
-4.8% Interest expense
$48,000
$72,000
-$24,000
-33.3% Income before taxes
$52,000
$33,000
$19,000
57.6% Income taxes
$18,200
$11,550
$6,650
57.6% Net income
$33,800
$21,450
$12,350
57.6%

Vertical Income Statement

(Vertical)
Mandrake Motorcycles

Income Statements

Year Ended
Year Ended

December 31, 2015
December 31, 2014
Net Sales
$1,590,000
100.0%
$1,690,000
100.0%
Cost of goods sold
$980,000
61.6%
$1,175,000
69.5%
Gross margin
$610,000
38.4%
$515,000
30.5%
Operating expenses:

Selling expenses
$300,000
18.9%
$210,000
12.4%
General and administrative expenses
$210,000
13.2%
$200,000
11.8%
Total Operating Expenses
$510,000
32.1%
$410,000
24.3%
Operating income
$100,000
6.3%
$105,000
6.2%
Interest expense
$48,000
3.0%
$72,000
4.3%
Income before taxes
$52,000
3.3%
$33,000
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