Perform horizontal analysis of the income statement and balance sheet data. Use 2017 as the base year. b. Perform vertical analysis of the income statement and balance sheet data for 2017 and 2018. Use sales revenue as the base figure for the income statement. Use total assets as the base figure for the balance sheet. C. Calculate the following liquidity ratios for 2018 and 2017: (1) working capital, (2) current ratio, (3) quick (acid- test) ratio, (4) accounts receivable turnover, (5) average days to collect receivables, (6) inventory turnover, and (7) average days to sell inventory. d. Calculate the following solvency ratios for 2018 and 2017: (1) debt to assets ratio, (2) debt to equity ratio, (3) number of times interest is earned, and (4) plant assets to long-term liabilities. e. Calculate the following profitability ratios for 2018 and 2017: (1) net margin, (2) asset turnover, (3) return on investment, and (4) return on equity. f. Calculate the following stock market ratios for 2018 and 2017: (1) earnings per share, (2) book value per share, (3) price-earnings ratio, and (4) dividend yield. Horizontal Inc Stmt Horizontal Balance Sht Vertical Inc Stm % Change Rosson Company Horizontal Analysis of Income Statements 2018 2017 Revenues: Net Sales Other Revenues Total Revenues Expenses: Cost of Goods Sold S,G&A Expenses Interest Expense Income Tax Expense Total Expenses Income Before Discontinued Operations Discontinued Operations (net of tax) Net Income Horizontal Inc Stmt Horizontal Balance Sht Vertical Inc Stmt % Change Rosson Company Horizontal Analysis of Balance Sheets 2018 2017 Assets Cash Marketable Securities Accounts Receivable Inventories Prepaid Expenses Total Current Assets Plant and Equipment (net) Intangibles Total Assets Liabilities Accounts Payable Other Accrued Liabilities Total Current Liabilities Bonds Payable Total Liabilities Stockholders' Equity Common Stock (S5 par) Paid-in Cap. in Excess of Par Retained Earnings Total Stockholders' Equity Total Liabilities and Stk. Equity Horizontal Inc Stmt Horizontal Balance Sht Vertical Inc Stmt Vertical B 2017 % of Total Amount Rosson Company Vertical Analysis of Income Statements 2018 Amount % of Total Revenues: Net Sales Other Revenues Total Revenues Expenses: Cost of Goods Sold S.G&A Expenses Interest Expense Income Tax Expense Total Expenses Income Before Discontinued Operations Discontinued Operations Gain (net of tax) Net Income Horizontal Inc Stmt Horizontal Balance Sht Vertical Inc Stmt Vertical Balance Sht Rosson Company Vertical Analysis of Balance Sheets 2018 2017 Amount % of Total Amount % of Total Assets Cash Marketable Securities Accounts Receivable Inventories Prepaid Expenses Total Current Assets Plant and Equipment (net) Intangibles Total Assets Liabilities Accounts Payable Other Accrued Liabilities Total Current Liabilities Bonds Payable Total Liabilities Stockholders' Equity Common Stock ($5 par) Paid-in Cap. in Excess of Par Retained Earnings Total Stockholders' Equity Total Liabilities and Stk. Equity Horizontal Inc Stmt Horizontal Balance Sht Vertical In & Liquidity Ratios 2018 2017 Working Capital $130,500 $107.000 2018 2017 to 1 to 1 2018 2017 to 1 to 1 2017: 2018 2017 nover times times (5) Avg. Days to Collect Receivables 2018 2017 days days 2018 2017 2018 2017 days d. Solvency Ratios 2018 2017 % % Horizontal Balance Sht Vertical Inc 2018 2017 to 1 to 1 e. Profitability Ratios 2018 2017 2018 2017 2018 2017 2018 2017 f. Stock Market Ratios 2018 2017 $ $ 7 7 2018 2017 $ 2018 2017 2018 2017 The information below comes from the financial statements of Rosson Company. Rosson Company Income Statement Years ended 2017 and 2018 2018 2017 Revenues: Net Sales $299,000 $246,000 Other Revenues 8,000 9,000 Total Revenues. 307,000 255,000 Expenses: Cost of Goods Sold 172,000 138,000 S,G&A Expenses... 44,000 40,000 Interest Expense 4,000 4,500 Income Tax Expense 31,000 25,400 Total Expenses 251.000 207.900 Income Before Discontinued Operations 56.000 47,100 Discontinued Operations Gain (net of tax) 9,000 0 Net Income $ 65,000 $ 47,100 Rosson Company Balance sheet Years ended 2017 and 2018 Assets Current Assets: Cash $ 7,500 $ 12,500 Marketable Securities, 1,000 1,500 Accounts Receivable 50,000 47,500 Inventories.. 150,000 145,000 Prepaid Expenses 5,000 2,500 213,500 209,000 Total Current Assets. Plant and Equipment (net). Intangibles 147,000 157,000 30,500 0 Total Assets.... $391,000 $366,000 Liabilities and Stockholders' Equity Liabilities: Current Liabilities: Accounts Payable $ 58,000 $ 79,500 Other Accrued Liabilities..... 25,000 22,500 Liabilities and Stockholders' Equity Liabilities: Current Liabilities: Accounts Payable... $ 58,000 $ 79,500 Other Accrued Liabilities, RE 25,000 22,500 83,000 102,000 Total Current Liabilities Bonds Payable............ 90,000 100,000 Total Liabilities. 173,000 202,000 Stockholders' Equity 130,000 130,000 20,000 20,000 Common Stock ($5 par) Paid In Capital in excess of Par ...... of Par Retained Earnings Total Stockholders' Equity......... Total Liabilities and Stockholders' 68,000 14,000 218,000 164,000 Equity... $391,000 $366.000 Common stock market price at year-end $14.00 $8.55 **Dividend payments amounted to $11,000 in 2018 and SS.000 in 2017 Perform horizontal analysis of the income statement and balance sheet data. Use 2017 as the base year. b. Perform vertical analysis of the income statement and balance sheet data for 2017 and 2018. Use sales revenue as the base figure for the income statement. Use total assets as the base figure for the balance sheet. C. Calculate the following liquidity ratios for 2018 and 2017: (1) working capital, (2) current ratio, (3) quick (acid- test) ratio, (4) accounts receivable turnover, (5) average days to collect receivables, (6) inventory turnover, and (7) average days to sell inventory. d. Calculate the following solvency ratios for 2018 and 2017: (1) debt to assets ratio, (2) debt to equity ratio, (3) number of times interest is earned, and (4) plant assets to long-term liabilities. e. Calculate the following profitability ratios for 2018 and 2017: (1) net margin, (2) asset turnover, (3) return on investment, and (4) return on equity. f. Calculate the following stock market ratios for 2018 and 2017: (1) earnings per share, (2) book value per share, (3) price-earnings ratio, and (4) dividend yield. Horizontal Inc Stmt Horizontal Balance Sht Vertical Inc Stm % Change Rosson Company Horizontal Analysis of Income Statements 2018 2017 Revenues: Net Sales Other Revenues Total Revenues Expenses: Cost of Goods Sold S,G&A Expenses Interest Expense Income Tax Expense Total Expenses Income Before Discontinued Operations Discontinued Operations (net of tax) Net Income Horizontal Inc Stmt Horizontal Balance Sht Vertical Inc Stmt % Change Rosson Company Horizontal Analysis of Balance Sheets 2018 2017 Assets Cash Marketable Securities Accounts Receivable Inventories Prepaid Expenses Total Current Assets Plant and Equipment (net) Intangibles Total Assets Liabilities Accounts Payable Other Accrued Liabilities Total Current Liabilities Bonds Payable Total Liabilities Stockholders' Equity Common Stock (S5 par) Paid-in Cap. in Excess of Par Retained Earnings Total Stockholders' Equity Total Liabilities and Stk. Equity Horizontal Inc Stmt Horizontal Balance Sht Vertical Inc Stmt Vertical B 2017 % of Total Amount Rosson Company Vertical Analysis of Income Statements 2018 Amount % of Total Revenues: Net Sales Other Revenues Total Revenues Expenses: Cost of Goods Sold S.G&A Expenses Interest Expense Income Tax Expense Total Expenses Income Before Discontinued Operations Discontinued Operations Gain (net of tax) Net Income Horizontal Inc Stmt Horizontal Balance Sht Vertical Inc Stmt Vertical Balance Sht Rosson Company Vertical Analysis of Balance Sheets 2018 2017 Amount % of Total Amount % of Total Assets Cash Marketable Securities Accounts Receivable Inventories Prepaid Expenses Total Current Assets Plant and Equipment (net) Intangibles Total Assets Liabilities Accounts Payable Other Accrued Liabilities Total Current Liabilities Bonds Payable Total Liabilities Stockholders' Equity Common Stock ($5 par) Paid-in Cap. in Excess of Par Retained Earnings Total Stockholders' Equity Total Liabilities and Stk. Equity Horizontal Inc Stmt Horizontal Balance Sht Vertical In & Liquidity Ratios 2018 2017 Working Capital $130,500 $107.000 2018 2017 to 1 to 1 2018 2017 to 1 to 1 2017: 2018 2017 nover times times (5) Avg. Days to Collect Receivables 2018 2017 days days 2018 2017 2018 2017 days d. Solvency Ratios 2018 2017 % % Horizontal Balance Sht Vertical Inc 2018 2017 to 1 to 1 e. Profitability Ratios 2018 2017 2018 2017 2018 2017 2018 2017 f. Stock Market Ratios 2018 2017 $ $ 7 7 2018 2017 $ 2018 2017 2018 2017 The information below comes from the financial statements of Rosson Company. Rosson Company Income Statement Years ended 2017 and 2018 2018 2017 Revenues: Net Sales $299,000 $246,000 Other Revenues 8,000 9,000 Total Revenues. 307,000 255,000 Expenses: Cost of Goods Sold 172,000 138,000 S,G&A Expenses... 44,000 40,000 Interest Expense 4,000 4,500 Income Tax Expense 31,000 25,400 Total Expenses 251.000 207.900 Income Before Discontinued Operations 56.000 47,100 Discontinued Operations Gain (net of tax) 9,000 0 Net Income $ 65,000 $ 47,100 Rosson Company Balance sheet Years ended 2017 and 2018 Assets Current Assets: Cash $ 7,500 $ 12,500 Marketable Securities, 1,000 1,500 Accounts Receivable 50,000 47,500 Inventories.. 150,000 145,000 Prepaid Expenses 5,000 2,500 213,500 209,000 Total Current Assets. Plant and Equipment (net). Intangibles 147,000 157,000 30,500 0 Total Assets.... $391,000 $366,000 Liabilities and Stockholders' Equity Liabilities: Current Liabilities: Accounts Payable $ 58,000 $ 79,500 Other Accrued Liabilities..... 25,000 22,500 Liabilities and Stockholders' Equity Liabilities: Current Liabilities: Accounts Payable... $ 58,000 $ 79,500 Other Accrued Liabilities, RE 25,000 22,500 83,000 102,000 Total Current Liabilities Bonds Payable............ 90,000 100,000 Total Liabilities. 173,000 202,000 Stockholders' Equity 130,000 130,000 20,000 20,000 Common Stock ($5 par) Paid In Capital in excess of Par ...... of Par Retained Earnings Total Stockholders' Equity......... Total Liabilities and Stockholders' 68,000 14,000 218,000 164,000 Equity... $391,000 $366.000 Common stock market price at year-end $14.00 $8.55 **Dividend payments amounted to $11,000 in 2018 and SS.000 in 2017