Question
Comparative financial statements for Bent Stew Enterprises are shown below: December 31 2014 2013 Assets Current assets: Cash $ 3,000 $ 800 Accounts receivable 8,500
Comparative financial statements for Bent Stew Enterprises are shown below:
December 31
20142013
Assets
Current assets:
Cash $ 3,000 $ 800
Accounts receivable 8,500 6,000
Inventory 12,000 8,200
Prepaid expenses1,400900
Total current assets 24,900 15,900
Property, plant, and equipment, net 103,600 123,300
Intangible assets, net64,00047,000
Total assets $192,500 $186,200
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 11,000 $ 12,000
Other current liabilities11,8003,200
Total current liabilities 22,800 15,200
Long-term debt120,000128,000
Total liabilities142,800143,200
Stockholders' equity:
Common stock 15,000 15,000
Additional paid-in capital 20,000 20,000
Retained earnings14,7008,000
Total stockholders' equity49,70043,000
Total liabilities and stockholders' equity $192,500 $186,200
Year Ended December 31
20142013
Sales $250,000 $ 230,000
Cost of goods sold164,000142,300
Gross margin 86,000 87,700
Operating expenses64,00054,000
Operating income 22,000 33,700
Interest expense7,5005,900
Earnings before income taxes 14,500 27,800
Income taxes7,8007,140
Net earnings $ 6,700 $ 20,660
Using vertical analysis, how would you best describe the change in the company's operating expenses from 2013 to 2014?
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