EXERCISES The following data is available for White Ltd and Wong Ltd. Calculate intra-entity hidity natios and discuss companatie analysis L01,4 E12.1 Wong 2016 $000 White 2016 $000 White 2015 Wong 2015 $000 $000 Cost of sales Current assets Cash +receivables+ 17988 18038 10151 15762 16002 9998 9130 10 200 marketable securities Net receivables 6800 6870 6547 7 300 3500 2001 3995 4389 3725 1926 29930 6860 Inventory Total assets Current liabilities Total liabilities 3 100 2290 35648 7770 34628 7753 17394 33000 7 200 18 231 14562 12450 Required (a) Calculate all the intra-entity comparisons in relation to liquidity that the data allows for White Ltd. (b) Why is it helpful to prepare intra-entity, inter-entity and industry comparisons when evaluating an entity? The financial information for Spencer Lid is provided below. E12.2 Prpare a borizontal analysis 30 June 2016 30 June 2017 $150 000 380 000 Current assets $103000 315000 Property, plant and equipment (net) Current liabilities Non-current liabilities Share capital, $1 each Retained eamings 85 000 72000 140000 104000 175 000 100000 130 000 142000 Required Prepare a horizontal analysis for 2017 using 2016 as the base year E12.3 The financial information for Forrester Ltd is provided below. Prepare borizontal anahsis 02) 30 June 2016 30 June 2017 $ 96000 $88000 630 000 50000 78000 Current assets Property, plant and equipment (net) Current liabilities Non-current liabilities Share capital, $1 each Retained eamings 680 000 45000 72000 450000 365000 209000 225000 Required (a) Prepare a schedule showing a horizontal analysis for 2017 using 2016 as the base year. (b) Explain the changes that have occurred for Forrester Ltd between 2016 and 2017 E12.4 Operating data for Spectre Ltd are presented here. Prpare ertical analsis and discuss the usefales of bortzontal and vertical anahsis LOS 2016 2017 $870000 460000 Sales $900 000 520000 Cost of sales Selling expenses Administrative expenses Income tax expense Profit 140000 93000 61000 65000 52 500 122 500 76800 179 200 Required (a) Prepare a schedule showing a vertical analysis for 2017 and 2016. (b) Why is it helpful to prepare horizontal and vertical analysis when evaluating an entity? 759 Chanter 12 Financial statement analusis and decision making