1. Using the two balance sheets provided, prepare a horizontal and vertical analysis for the period ending June 30, 2017. You only need to complete one vertical analysis using the June 30, 2017 balance sheet values.

2. Compare the vertical analysis results with the industry average information provided and identify any areas that you believe merit further investigation, including why you would investigate them further and likely reasons for the results.

3. Calculate the following ratios for the company for the year ended June 30, 2017:

1) Current Ratio

2) Acid-test ratio

3) Profit Margin

4) Asset Turnover

5) Return on Assets

6) Debt to Assets Ratio

B&L Landscapes, Inc. Mini Practice Part 3 Bill Graham and Larry Miller incorporated B&L Landscapes, Inc. on July 1, 2016. The business consists of lawn care and sprinkler system installations. In addition, they also sell two types of fertilizer. At the end of the first year, Bill and Larry have asked you to analyze their first year of operations and given them some suggestions on areas that may need improvement as they move into their second year. Below are the balance sheets for the date of incorporation and the end of the first year of operations. B&L Landscapes, Inc. Balance Sheet July 1, 2016 Assets Current Assets Cash $29,500 Accounts Receivable (net) 3,500 Prepaid Insurance 600 Inventory 2,000 Total Current Assets $35,600 Property, Plant and Equipment Land 9,000 Building 35,000 Equipment 17,500 61,500 Total Assets $97,100 Liabilities and Stockholders' Equity Current Liabilities Accounts Payable $10,000 Long-Term Liabilities Notes Payable 45,000 Total Liabilities $55,000 Stockholders' Equity Paid-in Capital Capital Stock 5% Preferred stock, $100 par value, 7,000 non-cumulative, non-participating, 5,000 shares authorized, 70 shares issued and outstanding Common stock, $1 par value, 150,000 35,100 shares authorized, 35,100 shares issued and outstanding Total Capital Stock 42,100 Retained Earnings 0 Total Stockholders' Equity 42,100 Total Liabilities and Stockholders' Equity $97,100 B&L Landscapes, Inc. Balance Sheet June 30, 2017 Assets Current Assets Cash Accounts Receivable (net) Prepaid Insurance Inventory Total Current Assets Property, Plant and Equipment Land Building Less Accumulated Depreciation Equipment Less Accumulated Depreciation Total Assets Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Long-Term Liabilities Notes Payable Total Liabilities Stockholders' Equity Paid-in Capital Capital Stock 5% Preferred stock, $100 par value, non-cumulative, non-participating, 5,000 shares authorized, 70 shares issued and outstanding Common stock, $1 par value, 150,000 shares authorized, 35,100 shares issued and outstanding Total Capital Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity $26,500 9,000 1,500 39,125 $76,125 9,000 35,000 1,625 21,600 3,000 33,375 18,600 Additional Information: Net Income for the year ending June 30, 2017 was $32,500 and $2,000 was paid in dividends. Net Sales for the year ending June 30, 2017 was $221,000. 60,975 $137,100 $19,500 45,000 $64,500 7,000 35,100 42,100 30,500 72,600 $137,100 Industry Averages - Landscaping Services Assets Current assets Plant assets (net) Total assets Liabilities Current Liabilities Long-term liabilities Total liabilities Stockholders' Equity Common stock, $1 par Preferred stock, $100 par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 45% 55% 100% 18% 15% 33% 10% 20% 37% 67% 100% Instructions: 1. Using the two balance sheets provided, prepare a horizontal and vertical analysis for the period ending June 30, 2017. You only need to complete one vertical analysis using the June 30, 2017 balance sheet values. 2. Compare the vertical analysis results with the industry average information provided and identify any areas that you believe merit further investigation, including why you would investigate them further and likely reasons for the results. 3. Calculate the following ratios for the company for the year ended June 30, 2017: 1) Current Ratio 2) Acid-test ratio 3) Profit Margin 4) Asset Turnover 5) Return on Assets 6) Debt to Assets Ratio Horizontal Analysis B&L LANDSCAPES, INC CONDENSED BALANCE SHEETS For the Years Ending June 30 2017 2016 Assets Liabilities Stockholders' Equity Vertical Analysis B&L LANDSCAPES, INC CONDENSED BALANCE SHEETS For the Years Ending June 30 2017 Amount Assets Liabilities Stockholders' Equity Percent Ratios Current Ratio Acid Test Ratio Profit Margin Asset Turnover Return on Assets Debt to Assets Ratio E SHEETS June 30 Increase or (Decrease) Amount Percent E SHEETS June 30 Industry Averages Percent Variance SP17