Exercise 14-1A (Algo) Horizontal analysis LO 14-1 Rooney Corporation reported the following operating results for two consecutive years: Required a. Compute the percentage changes in Rooney Corporation's income statement components between the two years. Note: Negative amounts should be indicated by a minus sign. Round your answers to 1 decimal place. (i.e., .234 should be entered as 23.4). ROONEY CORPORATION Income Statements Percentage Year 3 Year 2 Change Sales Cost of goods sold Gross margin Operating expenses Income before taxes $ 1,300,000 $1,000,500 % 799,500 600,300 500,500 400,200 305,000 196,500 195,500 203,700 Income taxes 61,600 52,800 Net income (loss) S 133,900 $ 150,900 % Exercise 14-2A (Algo) Vertical analysis LO 14-1 Stuart Company reported the following operating results for two consecutive years: Required Compute each income statement component for each of the two years as a percent of sales. Note: Percentages may not add exactly due to rounding. Round your answers to 1 decimal place. (i.e...234 should be entered as 23.4). STUART COMPANY Vertical Analysis of Income Statements Year 4 Percentage of Sales Year 3 for Year 4 Percentage of Sales for Year 3 Sales Cost of goods sold $ 995,000 % $ 1,083,000 % 547,250 601,600 Gross margin on sales 447,750 481,400 Operating expenses 130,700 148,800 Income before taxes 317,050 332,600 Income taxes 79,600 82,800 Net income S 237,450 % $ 249,800 % Exercise 14-4A (Algo) Inventory turnover LO 14-2 Selected financial information for Finch Company for Year 4 follows: Sales Cost of goods sold Merchandise inventory Beginning of year End of year Required $ 2,150,000 1,505,000 159,000 190,000 Assuming that the merchandise inventory buildup was relatively constant, how many times did the merchandise inventory turn over during Year 4? Note: Round your answer to 2 decimal places. Merchandise inventory turnover times Exercise 14-6A (Algo) Working capital and current ratio LO 14-2 On June 30, Year 3, Solomon Company's total current assets were $498,500 and its total current liabilities were $272,500. On July 1, Year 3, Solomon issued a short-term note to a bank for $41,400 cash. Required a. Compute Solomon's working capital before and after issuing the note. b. Compute Solomon's current ratio before and after issuing the note. Note: Round your answers to 2 decimal places. a. Working capital b. Current ratio Before the Transaction After the Transaction Exercise 14-8A (Algo) Ratio analysis LO 14-2, 14-3 The balance sheet for Munoz Corporation follows: Current assets Long-term assets (net) Total assets Current liabilities Long-term liabilities Total liabilities Common stock and retained earnings Total liabilities and stockholders' equity Required Compute the following. Note: Round ratios to 1 decimal place. Working capital Current ratio Debt-to-assets ratio Debt-to-equity ratio % $ 239,000 761,000 $ 1,000,000 $ 150,000 459,000 609,000 391,000 $ 1,000,000