Attached are the comparative balance sheets for Verdi Company at December 31, 20X1 and 20X0 as well as the income statement for the year ending December 31, 20X1. REQUIRED: (1) Prepare a horizontal analysis for the balance sheet from 20X0 to 20X1. Round all percentages to two decimal places (four places for those answers left in decimal form). Prepare a vertical analysis for the income statement. Round all percentages to two decimal places (four places for those answers left in decimal form). Compute the following financial ratios for the company for 20X1. Round all percentages to two decimal places (four places for those answers left in decimal form) and all other answers to two decimal places. (a) Return on average total assets. (b) Return on sales. Return on average common stockholders' equity. Current ratio. Quick ratio (1) Accounts receivable turnover. (g) Inventory tumover. (h) Debt to equity ratio. (c) (d) (e) VERDI COMPANY COMPARATIVE BALANCE SHEETS (IN THOUSANDS) AT DECEMBER 31, 20X1 AND 20X0 20X1 20x0 VERDI COMPANY COMPARATIVE BALANCE SHEETS (IN THOUSANDS) AT DECEMBER 31, 20X1 AND 20X0 20X1 2 0X0 ASSETS Cash $ 1,618S 1,220 Accounts Receivable 1,925 2,112 Merchandise Inventory 1,070 966 Prepaid Expenses 188 149 Buildings 4,818 3,292 Accumulated Depreciation, Buildings 361) 300) Equipment 1,434 1,145 Accumulated Depreciation, Equipment 100) TOTAL ASSETS $ 10,551 S 8,484 S S LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable Notes Payable, Short Term Notes Payable, Long Term Common Stock, No par value Retained Earnings TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 1,818 900 2,500 3,390 1,943 1,686 1,100 2,000 2,041 1,657 10,551 S 8,484 $ 11,228 7.751 3,477 VERDI COMPANY INCOME STATEMENT (IN THOUSANDS) FOR YEAR ENDING DECEMBER 31, 20X1 Sales Revenue Cost of Goods Sold Gross Margin From Sales Operating Expenses: Depreciation Expense, Buildings and Equipment 102 Other Selling and Administrative 2,667 Total Operating Expenses Income Before Interest and Income Taxes Interest Expense Income Before Income Taxes Income Tax Expense Net Income 2,769 708 168 540 114 426