Canadian Yogurt Inc. (CYI) had the following results over the past two years.

Required:
(a) Prepare a horizontal and vertical analysis of the balance sheet and the income statement.
(b) What conclusions can you draw from your analysis?
(c) Refer to the following data for the yogurt industry and explain if your opinion of Canadian Yogurt's performance in 2010 changes from your answer in part (b).
Industry Data
% Change in 2010 over 2009
Cash ........................................... 10%
Interest expense .............................. 30%
Sales ........................................... 5%
Net income .................................... -50%
Long-term liabilities ......................... 30%

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Canadian Yogurt Inc. Balance sheets as at December 31, 2010 2009 Current assets Cash Accounts receivable Inventory Total current assets 150,000 240,000 123,000 513,000 110,000 200,000 100,000 410,000 Property, plant, and equipment Land Baildings (ret) Equipment (inet) Total property, plant, and equipment 90,000 370,000 520,000 980,000 110,000 300,000 00,000 810,000 Total assets $ 1,493,000 S 1220,000 Current liabilities Acccunts payable Other payables Total current liabilitier Long-term liabilities Banik leans Total liabilities Shareholders equity Common shares Retained earnings Total shareholders equity S 110,000 45,000 155,000 $130,000 150,000 500,000 655,030 400,000 550,000 658,030 180,000 838,000 500,000 170,000 670,000 Total liabilities and shareholders' equity 1493,000 Canadian Yogurt Inc. Income Statements for the year ended December 31, 2010 2009 Sales Less: Cost of goods sold Gross profit Less: Operating costs $ 188003 3,000 115,D0D 69,000 46,000 20,000 26,000 S 220,000 90,000 130,000 85,000 Earnings before interest and taxes (EBIT 5,000 25,000 20,000 Less: Interest expense Earmings before taxes Less: Income tax expense Net income S 10,000 S 14,000