1.The statements of comprehensive income of the Brancatisano company for the past two years are as follows:

Statements of comprehensive income For the years ending 30 June
	2021	2020
Revenues	$300 000	$250 000
Cost of goods sold	125 000	100 000
Gross pro t	$175 000	$150 000
Operating expenses	75 000	50 000
Pro ts before interest and taxes	$100 000	$100 000
Interest expense	35 000	15 000
Pro ts before taxes	$ 65000	$ 85000
Income tax expense	25 000	30 000
Comprehensive income net of tax	3 000	7 000
Total comprehensive income	$ 43000	$ 62000

REQUIRED

2.Calculate and interpret a horizontal and vertical analysis of Brancatisanos income statements.

The following asset information is available for Samantha Limited:

	2020	2019
Cash	$ 15000	$ 10000
Accounts receivable	30 000	25 000
Inventory	75 000	75 000
Total current assets	120 000	110 000
Property and equipment	205 000	210 000
Total assets	$325 000	$320 000

REQUIRED

Calculate a vertical analysis of assets for both years. Comment on any differences that may be material.

3. Identify ratios

Identify each of the following ratios as a pro tability, liquidity or solvency ratio. Which ratio is likely to best indicate what equity investors believe is the future of the company compared to the present? Why?

1. a return on equity

2. b debt to assets ratio

3. c times interest earned

4. d quick ratio

5. e inventory turnover ratio

6. f accounts receivable turnover ratio

7. g price to earnings ratio

8. h pro t margin

9. i current ratio

10. j debt to equity ratio.