1. If a vertical analysis was done on El Hombre financial statements, what percent would be shown for retained earnings at the end of LAST year?
2. Using horizontal analysis, how much was the net change of El Hombre's accountsreceivable?

PROBLEM A. : The following data pertain to El Hombre Corporation. El Hombre CORPORATION Comparative Income Statement This Year Last Year Sales [all on account] ._.... ..... P 620,000 P400,000 Less cost of goods sold 260,000 220,000 Gross margin ................. _ 360,000 180,000 Less operating expenses . 240,000 80,000 Net operating income .. 120,000 100,000 Less interest expense ....... 20,000 30,000 Net income before taxes ..... 100,000 20,000 Less income taxes [30%) 30,000 2 1,000 Net income .............................. P?0,000 P 49,000 El Hombre CORPORATION Comparative Balance Sheet This Year Last Year Assets Current assets: Cash .................................... P 50,000 P 25,000 Marketable securities .. 30,000 25,000 Accounts receivable, net ........ 90,000 105,000 inventory ................. 100,000 75,000 Prepaid expenses .. 15,000 10,000 Plant and equipment, net ............. 400,000 300,000 Total assets .............................. _ P605.000 P6 20,000 Liabilities and Stackhaldem'quy Liabilities: Current liabilities ............................................... P12 5,000 P100,000 Bonds payable, 10% ............. _... 80,000 80,000 Total liabilities ............... 205,000 100.00 0 Stackhalders' equity Preferred stock, P100 par, 7% ............... 100,000 100,000 Common stock, P5 par ..................... 300,000 300,000 Retained earnings ..................... . . 80,000 40,000 Total stockholders' equity ............ 480,000 440,000 Total liabilities and stockholders' equity .......... P605,000 P620,000