On December 31, 2022, Madison Company had the following balances in selected asset accounts:

a. Conduct a horizontal and vertical analysis on each of the assets using the template provided. To conduct the industry horizontal analysis, compare Madison current year to industry current year.

b. Discuss the differences in Madison’s current year inventory balance to prior year and industry inventory balances. What is one reason for the differences in inventory balance?

c. Calculate Madison’s current ratio for this year, the previous year, and industry assuming current liabilities total $1,000, $1,500, and $2,500, respectively. How does Madison’s liquidity position appear?

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Cash Accounts receivable, net Inventory Prepaid expenses Long-term assets Total assets Madison Madison Current Prior Year Year 300 1,200 500 100 400 2,500 450 850 700 60 550 2,610 Industry Current Year 650 1,100 400 150 600 2,900