Tiger Investment company wants to do an investment in Flash Corporation that have better opportunity for them in future and give them stable returns. As an analyst and accountant of Tiger you have to represent horizontal and vertical analysis of Flash Corporation. FLASH CORPORATION INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 AND 2019 Year 2020 Year 2019 Net Sales $890,000 $995,000 Less: Cost of Goods Sold (including transportation) 475,000 593,000 Gross Profit $415,000 $402,000 Less: Operating Expenses Selling Expenses: Sales salaries and commissions $12,700 $15,300 Advertising 30,000 55,000 Delivery Service 15,200 12,200 Depreciation: store equipment 5,000 10,000 Other Selling Expenses 12,400 13,900 Total Selling Expenses $75,300 $106,400 General and administrative expense: Administrative and office salaries $70,000 $65,000 Utilities 5,100 7,700 Depreciation: plant and equipment 6,000 2,000 Other general and administrative expenses 15,700 14,600 Total general and administrative expenses $96,800 $89,300 Total operating expenses $172,100 $195,700 Operating Income $242,900 $206,300 Less (add): Non operating Items: Interest expense $ 30,000 $23,000 Purchase discounts lost 1,000 5,000 31,000 28,000 Income before Income Taxes $211,900 $178,300 Income Tax Expense 35,000 48,000 Net Income $176,900 $130,300 FLASH CORPORATION COMPARITIVE BALANCE SHEET ENDED ON DECEMBER 31, 2020 AND 2019 2020 2019 Current Assets: Cash and Cash Equivalent $ 25,000 $ 33,000 Marketable Securities 68,000 83,000 Accounts Receivable 350,000 331,000 Inventory 100,000 63,000 Prepaid Expenses 24,000 13,000 Total Current Assets $567,000 $523,000 Non Current Assets: Store Equipment 324,000 333,000 (net of accumulated depreciation) Plant and Equipment 501,000 475,000 (net of accumulated depreciation) Total Assets $1,392,000 $1,331,000 Liabilities and Stockholders Equity Current liabilities: Notes Payable (Short Term) $ 95,000 $ 85,000 Accounts Payable 56,000 66,000 Interest Payable 43,000 58,000 Income Taxes Payable 58,000 47,000 Other Accrued Expenses payable 55,000 45,000 Total Current Liabilities $307,000 $301,000 Non-Current Liabilities: Notes Payable (Long term) 40,000 0 Bonds Payable 400,000 300,000 Total Liabilities $747,000 $601,000 Stockholders Equity: 9% preferred stock $100 par $40,000 $65,000 Common Stock, $50 par 320,000 270,000 Additional Paid-in-Capital 80,000 100,000 Retained Earnings 205,000 295,000 Total Stockholders Equity $645,000 $730,000 Total Liabilities and Stockholders Equity $1,392,000 $1,331,000 Instructions: a. Prepare horizontal and vertical analysis of Flash Corporation. 10 Marks b. Illustrate your findings in your own wording for minimum of 400 words and maximum of 500 by comparing performance of company in both years 6 Marks