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    Activity 4.1 JKL Company Horizontal Analysis

    Uploaded by

    Chancellor Rimuru
    This comparative balance sheet and income statement for JKL Company shows that from 2019 to 2020: - Total assets increased 27.78% due to a 50% rise in non-current assets and 19.23% growth in current assets. - Net income grew 20.37% even as interest expenses ballooned 400%, because sales increased 28.57% while costs of goods sold fell 20%. - Overall the company saw rises in revenues, gross profits, operating income and net income despite higher operating expenses and interest costs, indicating improved financial performance over the year.

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    Activity 4.1 JKL Company Horizontal Analysis

    Uploaded by

    Chancellor Rimuru
    979 views4 pages
    This comparative balance sheet and income statement for JKL Company shows that from 2019 to 2020: - Total assets increased 27.78% due to a 50% rise in non-current assets and 19.23% growth in current assets. - Net income grew 20.37% even as interest expenses ballooned 400%, because sales increased 28.57% while costs of goods sold fell 20%. - Overall the company saw rises in revenues, gross profits, operating income and net income despite higher operating expenses and interest costs, indicating improved financial performance over the year.

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    Activity-4.1-JKL-Company-Horizontal-Analysis

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    This comparative balance sheet and income statement for JKL Company shows that from 2019 to 2020: - Total assets increased 27.78% due to a 50% rise in non-current assets and 19.23% growth in current assets. - Net income grew 20.37% even as interest expenses ballooned 400%, because sales increased 28.57% while costs of goods sold fell 20%. - Overall the company saw rises in revenues, gross profits, operating income and net income despite higher operating expenses and interest costs, indicating improved financial performance over the year.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    979 views4 pages

    Activity 4.1 JKL Company Horizontal Analysis

    Uploaded by

    Chancellor Rimuru
    This comparative balance sheet and income statement for JKL Company shows that from 2019 to 2020: - Total assets increased 27.78% due to a 50% rise in non-current assets and 19.23% growth in current assets. - Net income grew 20.37% even as interest expenses ballooned 400%, because sales increased 28.57% while costs of goods sold fell 20%. - Overall the company saw rises in revenues, gross profits, operating income and net income despite higher operating expenses and interest costs, indicating improved financial performance over the year.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 4

    JKL Company

    Comparative Balance Sheet


    For the Years 2019 and 2020

    Assets 2020
    Current Assets
    Cash ₱400,000
    Accounts Receivable 100,000
    Trading Securities 20,000
    Inventories 80,000
    Prepaid Expenses 20,000
    Total Current Assets ₱620,000
    Non-Current Assets
    Total Non-Current Assets 300,000
    Total Assets ₱920,000

    Liabilities and Owner's Equity


    Total Current Liabilities ₱50,000
    Total Non-Current Liabilities 450,000
    ₱500,000

    Owner's Equity
    L, Capital 420,000
    Total Liabilities and Owner's Equity ₱920,000

    Current Assets had an increase of 19.23%. It only increased by this much due to the decrease in
    Accounts Receivable by 16.67%, increase of Inventories by only 33.33% and increase of Prepaid
    Expense by 100%. With the decrease of Accounts Receivable, it tells that the company must manage
    their collections better. As to Trading Securities, it has decreased to 50% which indicates that security
    in trading must be made more secure and needs improvements. The Total Non-Current Assets
    increased by 50% which may be caused by what the company has bought that falls under non-current
    assets. Current liabilities in total decreased by 50% while Total Non-Current Liabilities and Owner’s
    Equity increased by 50% and 31.25%, respectively. Owner’s Equity increased because of L’s Capital
    or the owner’s capital. Which then results to an increase of total liabilities and owner’s equity by
    27.78%. Non-current liabilities increased may be due to the reason that the company has made tons of
    transactions that goes under this within the year. It can be said that the transactions made by the
    company might have been to secure payment for the purchases of non-current assets.
    2019 Amount Percent

    ₱290,000 ₱110,000 37.93%


    120,000 -20,000 -16.67%
    40,000 -20,000 -50%
    60,000 20,000 33.33%
    10,000 10,000 100%
    ₱520,000 100,000 19.23%

    200,000 100,000 50%


    ₱720,000 200,000 27.78%

    ₱100,000 -50,000 -50%


    300,000 150,000 50%
    ₱400,000 100,000 25%

    320,000 100,000 31.25%


    ₱720,000 200,000 27.78%

    ch due to the decrease in


    3% and increase of Prepaid
    hat the company must manage
    % which indicates that security
    tal Non-Current Assets
    ght that falls under non-current
    urrent Liabilities and Owner’s
    creased because of L’s Capital
    ies and owner’s equity by
    t the company has made tons of
    transactions made by the
    current assets.
    JKL Company
    Comparative Income Statement
    For the Years 2019 and 2020

    2020 2019
    Net Sales ₱900,000 ₱700,000
    Less: Cost of Goods Sold 80,000 100,000
    Gross Profit ₱820,000 ₱600,000
    Less: Operating Expenses 120,000 50,000
    Operating Income ₱700,000 ₱550,000
    Less: Interest Expense 50,000 10,000
    Net Income Before Tax ₱650,000 ₱540,000
    Less: Income Tax Expense 195,000 162,000
    Net Income After Tax ₱455,000 ₱378,000

    Net Sales increased by 28.57% which is good because this then results to higher gross
    profit and overall higher profitability. As we take a good look at the income statement,
    there is a decrease in Cost of Goods Sold by 20%. As the Cost of Goods Sold decreased,
    it resulted to an increase of gross profit by 36.67%. Even with the increase of Operating
    Expense by 140%, income from operating managed to increase by 27.27%. Regardless
    of the massive increase of the company’s interest expense by 400%, an increase can be
    seen in the Net Income Before Tax by 20.37%. Income Tax also had an increase of
    20.37% and same goes for the Net Income After Tax. After analyzing each factor of the
    Income Statement, we were able to interpret how net income managed to increase even
    with the huge increase of interest expense. Thus, the company can now comprehend that
    with the increase in interest expense, it didn’t bring about a decrease to the overall net
    income.
    Amount Percent
    ₱200,000 28.57%
    -20,000 -20%
    220,00 36.67%
    70,000 140%
    150,000 27.27%
    40,000 400%
    110,000 20.37%
    33,000 20.37%
    77,000 20.37%

    s to higher gross
    come statement,
    ds Sold decreased,
    ease of Operating
    27%. Regardless
    n increase can be
    n increase of
    each factor of the
    d to increase even
    w comprehend that
    o the overall net

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