2. Based on the results of your vertical and horizontal analyses, which accounts appear out of alignment?Provide a brief analysis of the relationships between the accounts.

AutoSave OFF HW7 Home Draw Page Layout Formulas Data Review View Tell me Share Comments Arial v 10 A A General Insert v 2x Delete v Paste B $ ~ % 9 Conditional Format Find & Formatting as lable Styles Format v Filter Select G19 X fx B C D E F G H K M N O P Statements of Financial Position As of June 30, 20X3, 20X2, and 20X1 (In Thousands) Horizontal Analysis Vertical Analysis June 30 June 30 June 30 Increase or (Decrease) Increase or (Decrease 20X3 20X2 20X1 20X3 20X3 20X2 Current assets: Cash and cash equivalents $ 2,388 $ 1,695 $ 453 $ 693 41% 1,242 274% 8% 12% Accounts receivable, net of allowance for doubtful accounts of $56; $171; and $105 June 30, 20X3; 20X2; and 20X1, respectively 5,592 3,432 2,094 63% 64% 19% 24% Inventories 9,434 5,034 3,26 4,400 87% 1,768 54% 32% Current portion of note 1,592 622 1,089 58% 970 156% 9% 11% Deferred income taxes 211 209 299 1% (90) -30% 1% Other current a 1,157 186 19% 419 76% 7% Total current assets 21,463 12,933 7,286 66% 5,647 78% 74% 10% 0% 0% Equipment and leasehold improvements, net 6,940 910 600 6,030 310 52% 24% 6% 21 Other assets 183 167 163 16 10% 2% 1% 1% 22 Deferred 222 126 34 96 76% 92 271% 1% 1% Intangible assets 274 251 252 23 9% (1 ) 0% 2% Total assets $ 29,082 $ 14,387 $ 8,335 $ 14,695 102% $ 6,052 73% 100% 100% Current Liabilities: Notes payable $ 1,625 $ 1,328 1,021 297 22% 307 30% 6%% 9% Current portion of long-term obligations under capital leases 136 103 95 33 32% 8% 0% 1% Accounts payable and accrued expenses 5,862 3,871 2,307 51% 614 CA CA CA CA 1,991 68% ncome taxes payable 591 86 23 4% CA CA CA CA 505 587% 2% 4% Total current liabilities 3,237 5,893 3,509 2,344 40% 2,384 68% 28% 41% Long-term obligations u der capital leases 367 161 79 206 128% 82 104% 1% 1% 36 Deferred income taxes 242 242 0% 0% 0% Total liabilities 6,054 3,588 2,792 46% 2,466 69% 30% 42% Stockholders' equity: Common stock 183 56 37 127 19 51% 1% 0% Additional paid-in capital 14,213 7,086 3,810 101% 3,276 36% 49% 19% 43 Retained earnings 5 840 1 191 900 4 649 390% 291 32% 20% 8% Start Here Balance Sheet Income Statement PPE Schedule Depreciation Schedule Lod 100%AutoSave OFF HW7 Home Insert Draw Page Layout Formulas Data Review View Tell me Share Comments X Arial v 10 A A ab v General Insert v 2x Delete v I v Paste I U A $ ~ % 9 Conditional Format Cell Sort & Ideas Formatting as lable Styles Format v Find & Filter Select G19 X V fx B C D E F G H J K M N O P Q 17 18 Total current assets 21,463 12,933 7,286 8,530 66% 5,647 78% 74% 90% 0% 0% 19 20 Equipment and leasehold improvements, net 6,940 910 600 6,030 $63% 310 52% 24% 6% 183 167 163 16 10% 4 2% 1% 1% Other assets Deferred income tax 222 126 34 96 76% 32 271% 1% 1% Intangible assets 274 251 252 23 9% 1 0% 1% 2% 25 Total assets $ 29,082 $ 14,387 $ 8,335 $ 14,695 102% $ 6,052 73% 100% 100% Current Liabilities: Notes payable $ 1,625 $ 1,328 $ 1,021 297 22% 307 30% 6% 9% Current portion of long-term obligations under capital leases 136 103 95 33 32% 1% Accounts payable and accrued expenses 5,862 CA CA CA CA 8 8% 0% 3,871 2,307 ,991 $1% 1,564 58% 20% 27% Income taxes payable 614 591 86 23 4% 505 587% 2% 4% 41% Total current liabilities 8,237 5,893 3,509 2,344 40% 2,384 68% 28% Long-term obligations under capital leases 367 161 79 206 128% 82 104% 1% 1 % 242 0% 0% 1% 0% Deferred income taxes 242 Total liabilities 8,846 6,054 3,588 2,792 46% 2,466 69% 30% 42% 39 40 Stockholders' equity: mon stock 183 56 37 127 227% 19 51% 1% 0% Additional paid-in capital 14,213 7,086 3,810 7, 127 101% 3,276 86% 49% 19% 8% Retained earnings 5,840 1, 191 900 4,649 390% 291 32% 20% Total stockholders' equity 20,236 8,333 4,747 11,903 143% 3,586 76% 70% 58% Total liabilities and stockholders' equity $ 29,082 $ 14,387 $ 8,335 14,695 102% $ 6,052 73% 100% 100% 50 Start Here Balance Sheet Income Statement PPE Schedule Depreciation Schedule + + 100%AutoSave OFF HW7 Page Layout Formulas Tell me Share Comments Home Draw Data Review View Arial v 10 A A General Insert v 2x Delete v Paste B $ ~ % 9 Conditional Format Formatting as lable Styles Format v Filter Select G19 X fx E F G H K M N O P Q U B C R V D Position 2, and 20X1 Horizontal Analysis Vertical Analysis June 30, June 30, June 30, Increase or (Decrease) Increase or (Decrease) 20X3 20X1 20X3 20X2 20X3 20X2 20X1 20X2 5% $ 2,388 $ 1,695 453 693 41% 1,242 274% 8% 12% 24% 25% ,592 3,432 2,094 63% ,338 64% 19% 9,434 5,034 3,266 4,400 87% 1,768 54% 32% 35% 39% 2,681 622 68% 970 156% 9% 11% 7% 211 209 299 1% (90) 30% 1% 1% 4% 1, 157 971 552 186 19% 419 76% 4% 7% 7% 21,463 12,933 8,530 5,647 78% 74% 90% 87% 7,286 66% 0% 0% 0% 6.940 910 60 6,030 663% 310 52% 24% 6% 7% 167 163 16 10% 4 1% 1% 2% 18 222 126 34 96 6% 2719% 1% 1% 0% 1% 2% 3% 274 251 252 23 9% (1) 0% $ 29,082 $ 14,387 8,335 $ 102% $ 6,052 73% 100% 100% 100% $ 1,625 297 9% 12% $ 1,328 $ 1,021 307 30% 5% 95 33 32% 8% 1% 1% 136 103 5,862 1,991 51% 1,564 68% 27% 614 2% 4% 1% 591 86 23 4% 505 42% 8,237 5,893 3,509 2,344 40% 2,384 28% 41% 367 161 79 206 128% 82 104% 1% 1% 1% 1% 0% 0% 242 242 0% 0% 8,846 6,054 2,792 46% 2,466 39% 30% 42% 43% 56 227% 19 51% 0% 0% 183 37 127 1% 14,213 7,086 ,810 , 127 1019 3,276 36% 49% 49% 46% 13 5 840 900 649 390% 291 32% 20% 8% 1 1% Start Here Balance Sheet Income Statement PPE Schedule Depreciation Schedule + 100%AutoSave OFF HW7 Home Insert Draw Page Layout Formulas Data Review View Tell me Share Comments Arial v 10 A A ab v General Insert v max Delete v Paste B A $ ~ % Conditional Format Cell Format v Sort & Find & Ideas Formatting as lable Styles Filter Select G19 X V fx U V W B C D F G H K M N O P Q R S T 16 1,157 971 552 186 19% 419 76% 4% 70% 7% 21,463 12,933 7,286 8,530 66% 5,647 78% 74% 90% 37% 0% 0% 0% 6,940 910 600 6,030 663% 310 52% 6% 7% 183 167 163 16 10% 4 2% 1% 1% 2% 222 126 34 76% 92 271% 1% 1% 0% 252 23 9% 1% 2% 3% 274 251 (1) 0% $ 29,082 $ 14,387 $ 8 $ 14,695 102% $ 6,052 73% 100% 100% $ 1,625 $ 1,328 $ 1,021 CA CA CA CA 297 22% 307 30% 6% 9% 12% 136 103 95 33 32% CA CA CA CA 8% 0% 1% 1% 5,862 3,871 2,307 1,991 51% 1,564 58% 20% 27% 28% 614 591 86 23 4% 505 587% 2% 4% 1% 8,237 5,893 3,509 2,344 40% 2,384 68% 28% 41% 42% 367 161 79 206 128% 82 1% 1% 1% 242 0% 0% 1% 0% 0% 242 38 8,846 6,054 2,792 46% 2,466 69% 42% 43% 183 0% 0% 56 127 227% 19 51% 1% 7,086 37 3,810 , 127 101% 3,276 86% 49% 49% 46% 14,213 5,840 1, 191 900 4,649 390% 291 32% 20% 8% 11% 20,236 8,333 4,747 11,903 143% 3,586 76% 70% 58% 57% 47 $ 29,082 $ 14,387 $ 8,335 14,695 102% 6,052 73% 100% 100% 00% 48 49 50 52 55 56 57 Start Here Balance Sheet Income Statement PPE Schedule Depreciation Schedule + + 100%AutoSave OFF HW7 Home Insert Draw Page Layout Formulas Data Review View Tell me Share Comments X Aria v 10 A A ab v Custom Insert v 2x Delete v I v Ideas Paste B v MVA $ ~ % Conditional Format Cell Format v Sort & Find & Formatting as lable Styles Filter Select B19 X V =+B15-B16-B17 A C D E F G H J K L M N O P Q R S T U V IO MI A W N - Statements of Income For the Periods Ending June 30, 20X3, 20X2, and 20X1 (In Thousands Horizontal Analysis Vertical Analysis 20X3 20X2 20X1 Increase or (Decrease) Increase or (Decrease) 20X3 20X 20X3 20X2 20X1 Sales $ 18,848 $ 12,445 $ 8,213 $ 6,403 51% $ 4,232 52% 405% 4282% 2140% Cost of goods sold 10,598 6,833 4,523 $ 3,765 55% 51% 28% 2351% 1179% Gross profit 8 .250 5,612 3,690 $ 2,638 $ 2,310 47% $ 1,922 52% 177% 1931% 961% General and administrative expenses 967 3,366 1.889 $ (2,399) -71% $ 78% 21% 1 158% 492% Research and development costs 149 1,335 895 $ (1,186) -89% $ 440 49% 3% 459% Income from operations 7,134 911 906 $ 6,22 683% 1% 153% 313% 236% Net interest ex 217 64 161 153 239% (97) 60% 5% 22% 42% Loss on sale of receivables, factored 77 0% (77 ) -100% 0% 20% Income before income taxes 6,917 847 668 $ 6,070 717% $ 179 27% 149% 291% 174% 2,268 284 $ 1,712 $ 272 96% 49% 191% 74% Provision for income taxes 556 308% Net income $ 4,649 $ 291 $ 384 $ 4,358 1499% $ (93) -24% 100% 100% 100% Start Here Balance Sheet Income Statement PPE Schedule Depreciation Schedule + Average: 2,902 Count: 5 Sum: 14,509 + 100%