Between August 1 and September 10, 1986, revenue from the Company’s reported insurance restoration projects supposedly aggregated $4,957,920, including $1,940,213 through joint ventures. As of September 30, 1986, the Company allegedly was working on 13 contracts aggregating $24,362,000 of which seven, aggregating $15,068,000, were through joint ventures. The restoration work was accounted for under the percentage-of-completion method of accounting
Typically, the Company’s joint venture partners arranged for the financing (e.g., short-term bank loans) necessary to undertake the restoration projects. This financing supposedly covered the costs of materials and supplies, employee transportation and lodging costs, payroll, and other expenses estimated to be incurred before the first progress payment was received from the insurance adjuster (generally, after approximately 25 percent of the work had supposedly been performed). The Company was primarily liable for the debt and the joint venture was secondarily liable
The profitability of a restoration contract depended on the Company’s ability to control its expenses, the principal one of which was the cost of replacing the flooring materials. The Company claimed it had available a pool of approximately 200 experienced people capable of performing the restoration work, 90 of whom were Company employees and 110 of whom were independent contractors. Most of these people were supposedly located in Southern California and were deployed, as needed, to the various project sites
Using the facts above and the financial information on the subsequent pages, complete the following exercises: 

 Prepare a vertical analysis for each of the following three periods: 

Fiscal Year Ended April 30, 1985 

Fiscal Year Ended April 30, 1986 

Quarter Ended July 31, 1986