Financial Statement Analysis

and Interpretation
Module 2
Topic:
► Basic Financial Statements
❖ Statement of Financial Position or Balance Sheet
❖ Statement of Profit or Loss or Income Statement
❖ Statement of Cash Flows
❖ Statement of Changes in Stockholders’ Equity
► Financial Statement Analysis
❖ Horizontal Analysis
❖ Vertical Analysis
❖ Analysis through ratio interpretation
Financial Statement
Financial Statement are a structured
representation of the financial position and
financial performance of an entity. The objective
of financial statements is to provide information
about financial position, financial performance
and cash flows of an entity that is useful to a wide
range of users in making economic decisions.
Financial Statement
Financial Statement also show the results of the management’s stewardship of
the resources entrusted to it. To meet this objective, financial statements
provide information about an entity’s:
a. assets;
b. Liabilities; statement of financial position
c. Equity;
d. Income and expenses, including gains and losses; statement of
comprehensive income
e. Contributions by and distributions to owners in their capacity as owners; and –
statement of changes in equity
f. Cash flows. Statement of cash flow
Balance Sheet
The balance sheet displays the company’s total assets, and how these assets are
financed, through either debt or equity. It can also be referred to as a statement
of net worth, or a statement of financial position. The balance sheet is based on
the fundamental equation: Assets = Liabilities + Equity.
Balance Sheet
Income Statement

► The Income Statement is one of a company’s core financial statements that

shows their profit and loss over a period of time. The statement displays the
company’s revenue, costs, gross profit, selling and administrative expenses,
other expenses and income, taxes paid, and net profit in a coherent and
logical manner.
Income Statement
Statement of Changes in Equity
The financial statement that lists the components of stockholders' equity, their
balances, and the changes that occurred during an accounting year is also known
by the following titles:
⮚ Statement of Stockholders' Equity
⮚ Statement of Shareholders' Equity
⮚ Statement of Changes in Stockholders' Equity
⮚ Statement of Changes in Shareholders' Equity

The major components of stockholders' equity (and therefore the headings found
within the statement of stockholders' equity) include:
⮚ Paid-in capital – common stock
⮚ Paid-in capital – excess of par value
⮚ Retained earnings (or accumulated deficit when negative)
⮚ Accumulated other comprehensive income (or loss)
⮚ Treasury stock (an amount that is a subtraction)
Statement of Changes in Equity
Statement of Cash Flow
• The statement of cash flows (SCF) or cash flow statement reports a
corporation's significant cash inflows and outflows that occurred during an
accounting period.
• The cash inflows are the cash amounts that were received or have a
favourable effect on a corporation's cash balance. Hence, they will appear as
positive amounts.
• The cash outflows are the cash amounts that were used or have an
unfavourable effect on a corporation's cash balance. Hence, they will appear
in parentheses to indicate that they had a negative effect.
• The major cash flows occurring during an accounting period are reported
under the following headings or sections of the SCF:

► cash flows provided or used in operating activities

► cash flows provided or used in investing activities
► cash flows provided or used in financing activities
Statement of Cash Flow
Flow of Financial Statement Preparation
Financial Statements Analysis
The objective of accounting is to provide information that
will helpful in decision-making. Financial statements are
able to provide information about the entity’s financial
position, financial performance and cash flows.
It is important for the owners and managers of the entity to
be able to evaluate the results of all their business
activities. This analysis can help them:
• Confirm past expectations
• Evaluate present financial results
• Predict future outcomes
Financial Statements Analysis
Three ways of Financial Analysis:
• Horizontal Analysis
• Vertical Analysis
• Analysis through ratio interpretation
Horizontal Analysis
Horizontal Analysis is the method of
comparing and analyzing financial results of
different accounting periods in each financial
statement account and element.
Horizontal Analysis
Amount Change
✔To compute:
Amount change = current year – prior year

Percentage Change
✔To compute:
Percentage change = amount change / base year
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000

Accounts Receivable 58,500 90,000

Supplies 28,000 40,000

Land 360,000 300,000

Equipment 120,000 120,000

TOTAL ASSETS 1,066,500 950,000

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000

Accounts Receivable 58,500 90,000

Supplies 28,000 40,000

Land 360,000 300,000

Equipment 120,000 120,000

TOTAL ASSETS 1,066,500 950,000

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000

Supplies 28,000 40,000

Land 360,000 300,000

Equipment 120,000 120,000

TOTAL ASSETS 1,066,500 950,000

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500

Supplies 28,000 40,000

Land 360,000 300,000

Equipment 120,000 120,000

TOTAL ASSETS 1,066,500 950,000

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000

Land 360,000 300,000

Equipment 120,000 120,000

TOTAL ASSETS 1,066,500 950,000

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000

Land 360,000 300,000

Equipment 120,000 120,000

TOTAL ASSETS 1,066,500 950,000

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000

Equipment 120,000 120,000

TOTAL ASSETS 1,066,500 950,000

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000

Equipment 120,000 120,000

TOTAL ASSETS 1,066,500 950,000

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000

TOTAL ASSETS 1,066,500 950,000

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 -

TOTAL ASSETS 1,066,500 950,000

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000 116,500

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000 116,500 12.26%

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000 116,500 12.26%

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000 51,500

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000 116,500 12.26%

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000 51,500 51.50%

Notes payable 200,000 200,000

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000 116,500 12.26%

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000 51,500 51.50%

Notes payable 200,000 200,000 -

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000 116,500 12.26%

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000 51,500 51.50%

Notes payable 200,000 200,000 - -

Capital 715,000 650,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000 116,500 12.26%

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000 51,500 51.50%

Notes payable 200,000 200,000 - -

Capital 715,000 650,000 65,000

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000 116,500 12.26%

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000 51,500 51.50%

Notes payable 200,000 200,000 - -

Capital 715,000 650,000 65,000 10%

TOTAL LIABILITIES AND 1,066,500 950,000

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000 116,500 12.26%

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000 51,500 51.50%

Notes payable 200,000 200,000 - -

Capital 715,000 650,000 65,000 10%

TOTAL LIABILITIES AND 1,066,500 950,000 116,500

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000 116,500 12.26%

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000 51,500 51.50%

Notes payable 200,000 200,000 - -

Capital 715,000 650,000 65,000 10%

TOTAL LIABILITIES AND 1,066,500 950,000 116,500 12.26%

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000 116,500 12.26%

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000 51,500 51.50%

Notes payable 200,000 200,000 - -

Capital 715,000 650,000 65,000 10%

TOTAL LIABILITIES AND 1,066,500 950,000 116,500 12.26%

CAPITAL
Horizontal Analysis
2020 2019 Amount Percentage Change
Change
ASSETS

Cash 500,000 400,000 100,000 25%

Accounts Receivable 58,500 90,000 -31,500 -35%

Supplies 28,000 40,000 -12,000 -30%

Land 360,000 300,000 60,000 20%

Equipment 120,000 120,000 - -

TOTAL ASSETS 1,066,500 950,000 116,500 12.26%

LIABILITIES AND
CAPITAL
Accounts payable 151,500 100,000 51,500 51.50%

Notes payable 200,000 200,000 - -

Capital 715,000 650,000 65,000 10%

TOTAL LIABILITIES AND 1,066,500 950,000 116,500 12.26%

CAPITAL
Horizontal Analysis (Income Statement)
Vertical Analysis or Common Size
Analysis
Vertical analysis is the method of analyzing financial results expressing each
financial statement account and element as a component of a base.

2020 Component

ASSETS
Cash 500,000 46.88%
Accounts receivables 58,500 5.49%
Vertical Analysis
Amount Change
✔To compute:
component= account title to be analyze /base x 100
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 400,000
Accounts Receivable 58,500 90,000
Supplies 28,000 40,000
Land 360,000 300,000
Equipment 120,000 120,000
TOTAL ASSETS 1,066,500 950,000
LIABILITIES AND CAPITAL
Accounts payable 151,500 100,000
Notes payable 200,000 200,000
Capital 715,000 650,000
TOTAL LIABILITIES AND 1,066,500 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 400,000
Accounts Receivable 58,500 90,000
Supplies 28,000 40,000
Land 360,000 300,000
Equipment 120,000 120,000
TOTAL ASSETS 1,066,500 100% 950,000
LIABILITIES AND CAPITAL
Accounts payable 151,500 100,000
Notes payable 200,000 200,000
Capital 715,000 650,000
TOTAL LIABILITIES AND 1,066,500 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000
Accounts Receivable 58,500 90,000
Supplies 28,000 40,000
Land 360,000 300,000
Equipment 120,000 120,000
TOTAL ASSETS 1,066,500 100% 950,000
LIABILITIES AND CAPITAL
Accounts payable 151,500 100,000
Notes payable 200,000 200,000
Capital 715,000 650,000
TOTAL LIABILITIES AND 1,066,500 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000
Accounts Receivable 58,500 5.49% 90,000
Supplies 28,000 40,000
Land 360,000 300,000
Equipment 120,000 120,000
TOTAL ASSETS 1,066,500 100% 950,000
LIABILITIES AND CAPITAL
Accounts payable 151,500 100,000
Notes payable 200,000 200,000
Capital 715,000 650,000
TOTAL LIABILITIES AND 1,066,500 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000
Accounts Receivable 58,500 5.49% 90,000
Supplies 28,000 2.63% 40,000
Land 360,000 300,000
Equipment 120,000 120,000
TOTAL ASSETS 1,066,500 100% 950,000
LIABILITIES AND CAPITAL
Accounts payable 151,500 100,000
Notes payable 200,000 200,000
Capital 715,000 650,000
TOTAL LIABILITIES AND 1,066,500 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000
Accounts Receivable 58,500 5.49% 90,000
Supplies 28,000 2.63% 40,000
Land 360,000 33.76% 300,000
Equipment 120,000 120,000
TOTAL ASSETS 1,066,500 100% 950,000
LIABILITIES AND CAPITAL
Accounts payable 151,500 100,000
Notes payable 200,000 200,000
Capital 715,000 650,000
TOTAL LIABILITIES AND 1,066,500 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000
Accounts Receivable 58,500 5.49% 90,000
Supplies 28,000 2.63% 40,000
Land 360,000 33.76% 300,000
Equipment 120,000 11.25% 120,000
TOTAL ASSETS 1,066,500 100% 950,000
LIABILITIES AND CAPITAL
Accounts payable 151,500 100,000
Notes payable 200,000 200,000
Capital 715,000 650,000
TOTAL LIABILITIES AND 1,066,500 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000
Accounts Receivable 58,500 5.49% 90,000
Supplies 28,000 2.63% 40,000
Land 360,000 33.76% 300,000
Equipment 120,000 11.25% 120,000
TOTAL ASSETS 1,066,500 100% 950,000
LIABILITIES AND CAPITAL
Accounts payable 151,500 100,000
Notes payable 200,000 200,000
Capital 715,000 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000
Accounts Receivable 58,500 5.49% 90,000
Supplies 28,000 2.63% 40,000
Land 360,000 33.76% 300,000
Equipment 120,000 11.25% 120,000
TOTAL ASSETS 1,066,500 100% 950,000
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000
Notes payable 200,000 200,000
Capital 715,000 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000
Accounts Receivable 58,500 5.49% 90,000
Supplies 28,000 2.63% 40,000
Land 360,000 33.76% 300,000
Equipment 120,000 11.25% 120,000
TOTAL ASSETS 1,066,500 100% 950,000
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000
Notes payable 200,000 18.75% 200,000
Capital 715,000 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000
Accounts Receivable 58,500 5.49% 90,000
Supplies 28,000 2.63% 40,000
Land 360,000 33.76% 300,000
Equipment 120,000 11.25% 120,000
TOTAL ASSETS 1,066,500 100% 950,000
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000
Notes payable 200,000 18.75% 200,000
Capital 715,000 67.04% 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000
Accounts Receivable 58,500 5.49% 90,000
Supplies 28,000 2.63% 40,000
Land 360,000 33.76% 300,000
Equipment 120,000 11.25% 120,000
TOTAL ASSETS 1,066,500 100% 950,000 100%
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000
Notes payable 200,000 18.75% 200,000
Capital 715,000 67.04% 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000 42.11%
Accounts Receivable 58,500 5.49% 90,000
Supplies 28,000 2.63% 40,000
Land 360,000 33.76% 300,000
Equipment 120,000 11.25% 120,000
TOTAL ASSETS 1,066,500 100% 950,000 100%
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000
Notes payable 200,000 18.75% 200,000
Capital 715,000 67.04% 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000 42.11%
Accounts Receivable 58,500 5.49% 90,000 9.47%
Supplies 28,000 2.63% 40,000
Land 360,000 33.76% 300,000
Equipment 120,000 11.25% 120,000
TOTAL ASSETS 1,066,500 100% 950,000 100%
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000
Notes payable 200,000 18.75% 200,000
Capital 715,000 67.04% 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000 42.11%
Accounts Receivable 58,500 5.49% 90,000 9.47%
Supplies 28,000 2.63% 40,000 4.21%
Land 360,000 33.76% 300,000
Equipment 120,000 11.25% 120,000
TOTAL ASSETS 1,066,500 100% 950,000 100%
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000
Notes payable 200,000 18.75% 200,000
Capital 715,000 67.04% 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000 42.11%
Accounts Receivable 58,500 5.49% 90,000 9.47%
Supplies 28,000 2.63% 40,000 4.21%
Land 360,000 33.76% 300,000 31.58%
Equipment 120,000 11.25% 120,000
TOTAL ASSETS 1,066,500 100% 950,000 100%
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000
Notes payable 200,000 18.75% 200,000
Capital 715,000 67.04% 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000 42.11%
Accounts Receivable 58,500 5.49% 90,000 9.47%
Supplies 28,000 2.63% 40,000 4.21%
Land 360,000 33.76% 300,000 31.58%
Equipment 120,000 11.25% 120,000 12.63%
TOTAL ASSETS 1,066,500 100% 950,000 100%
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000
Notes payable 200,000 18.75% 200,000
Capital 715,000 67.04% 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000 42.11%
Accounts Receivable 58,500 5.49% 90,000 9.47%
Supplies 28,000 2.63% 40,000 4.21%
Land 360,000 33.76% 300,000 31.58%
Equipment 120,000 11.25% 120,000 12.63%
TOTAL ASSETS 1,066,500 100% 950,000 100%
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000
Notes payable 200,000 18.75% 200,000
Capital 715,000 67.04% 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000 100%
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000 42.11%
Accounts Receivable 58,500 5.49% 90,000 9.47%
Supplies 28,000 2.63% 40,000 4.21%
Land 360,000 33.76% 300,000 31.58%
Equipment 120,000 11.25% 120,000 12.63%
TOTAL ASSETS 1,066,500 100% 950,000 100%
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000 10.53%
Notes payable 200,000 18.75% 200,000
Capital 715,000 67.04% 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000 100%
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000 42.11%
Accounts Receivable 58,500 5.49% 90,000 9.47%
Supplies 28,000 2.63% 40,000 4.21%
Land 360,000 33.76% 300,000 31.58%
Equipment 120,000 11.25% 120,000 12.63%
TOTAL ASSETS 1,066,500 100% 950,000 100%
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000 10.53%
Notes payable 200,000 18.75% 200,000 21.05%
Capital 715,000 67.04% 650,000
TOTAL LIABILITIES AND 1,066,500 100% 950,000 100%
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000 42.11%
Accounts Receivable 58,500 5.49% 90,000 9.47%
Supplies 28,000 2.63% 40,000 4.21%
Land 360,000 33.76% 300,000 31.58%
Equipment 120,000 11.25% 120,000 12.63%
TOTAL ASSETS 1,066,500 100% 950,000 100%
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000 10.53%
Notes payable 200,000 18.75% 200,000 21.05%
Capital 715,000 67.04% 650,000 68.42%
TOTAL LIABILITIES AND 1,066,500 100% 950,000 100%
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000 42.11%
Accounts Receivable 58,500 5.49% 90,000 9.47%
Supplies 28,000 2.63% 40,000 4.21%
Land 360,000 33.76% 300,000 31.58%
Equipment 120,000 11.25% 120,000 12.63%
TOTAL ASSETS 1,066,500 100% 950,000 100%
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000 10.53%
Notes payable 200,000 18.75% 200,000 21.05%
Capital 715,000 67.04% 650,000 68.42%
TOTAL LIABILITIES AND 1,066,500 100% 950,000 100%
CAPITAL
Vertical Analysis
2020 Common Size 2019 Common Size
ASSETS
Cash 500,000 46.88% 400,000 42.11%
Accounts Receivable 58,500 5.49% 90,000 9.47%
Supplies 28,000 2.63% 40,000 4.21%
Land 360,000 33.76% 300,000 31.58%
Equipment 120,000 11.25% 120,000 12.63%
TOTAL ASSETS 1,066,500 100% 950,000 100%
LIABILITIES AND CAPITAL
Accounts payable 151,500 14.21% 100,000 10.53%
Notes payable 200,000 18.75% 200,000 21.05%
Capital 715,000 67.04% 650,000 68.42%
TOTAL LIABILITIES AND 1,066,500 100% 950,000 100%
CAPITAL
Vertical Analysis