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57. A horizontal analysis performed on a

statement of retained earnings would **not**

show a percentage change in

a. dividends paid.

b. net income.

c. expenses.

d. beginning retained earnings.

58. Under which of the following cases may a

percentage change be computed?

a. The trend of the balances is decreasing but

all balances are positive.

b. There is no balance in the base year.

c. There is a positive balance in the base year

and a negative balance in the subsequent year.

d. There is a negative balance in the base year

and a positive balance in the subsequent year.

59. Assume the following sales data for a

company:

2014 $945,000

2013 877,500

2012 675,000

If 2012

is the base year, what is the percentage increase in sales from 2012 to 2013?

a. 76.9%

b. 30%

c. 40%

d. 71.4%

60. Assume the following cost of goods sold

data for a company:

2014 $1,704,000

2013 1,400,000

2012 1,200,000

If 2012

is the base year, what is the percentage increase in cost of goods sold from

2012 to 2014?

a. 70.4%

b. 42%

c. 85.7%

d. 117%

61. Saira,

Inc. has the following income statement (in millions):

SAIRA,

INC.

Income

Statement

For the Year

Ended December 31, 2014

Net Sales $300

Cost of Goods Sold

__ 180__

Gross Profit 120

Operating Expenses __ 45__

Net Income __$75__

Using

vertical analysis, what percentage is assigned to Cost of Goods Sold?

a. 40%

b. 60%

c. 100%

d. None

of these answer choices are correct.

62. Saira, Inc. has the

following income statement (in millions):

SAIRA,

INC.

Income

Statement

For the Year

Ended December 31, 2014

Net Sales $300

Cost of Goods Sold

__ 180__

Gross Profit 120

Operating Expenses __ 45__

Net Income __$75__

Using

vertical analysis, what percentage is assigned to Net Income?

a. 625%

b. 40%

c. 25%

d. None

of these answer choices are correct.

63. Vertical analysis is also called

a. common

size analysis.

b. horizontal

analysis.

c. ratio

analysis.

d. trend analysis.

64. Vertical analysis is a technique which

expresses each item within a financial statement

a. in dollars and cents.

b. in terms of a percentage of the item in the

previous year.

c. in terms of a percent of a base amount.

d. starting with the highest value down to the

lowest value.

65. In common size analysis,

a. a base amount is required.

b. a base amount is optional.

c. the same base is used across all financial

statements analyzed.

d. the results of the horizontal analysis are

necessary inputs for performing the analysis.

66. In performing a vertical analysis, the base

for prepaid expenses is

a. total current assets.

b. total assets.

c. total liabilities and stockholders’ equity.

d. prepaid expenses.