Again, use the what and whyformatas explained in Section One;tell me whatthe numbers say and why it is important.Answer questions such as what areas do the numbers show are of concern, what changes should the CEO make or look into, etc. As in any analysis, you can also discuss what is good and is therefore probably not a concern to the CEO. Use your textbook to help you develop your analysis so that it is meaningful.

To demonstrate your knowledge of Horizontal Analysis and Vertical Analysis, I am giving you a problem from the Spiceland textbook but not to worry, I am also giving you the solutions (highlighted in red font). My focus here is for you to do just the analysis. My thinking on this one is that the computer will spit out the calculation but you need to be able to interpret the results. Please realize that I am not asking you to do all the work shown below; it is already done for you thereby significantly reducing the amount of work you need to do for this section. $168,000 0 76,000 $129,200 3,800 76,000 38,800 -3,800 30 -100 Current liabilities: Accounts payable Interest payable Income tax payable Long-term liabilities: Notes payable Stockholders' equity: Common stock Retained earnings Total liabilities and stockholders' equity 760,000 760,000 786,600 2,209,400 $4,000,000 786,600 2,044,400 $3,800,000 165,000 $200,000 8.1 5.3