Trend percentages are a form of horizontal analysis, showing change across time Percentages are calculated for each item on the statement as a percentage of that item in the base year The earliest period is the base year, which is set equal to 100 Trend Percentages 12 31 14 12 31 13 12 31 12 12 31 11 12 31 10 12 31 14 12 31 13 12 31 12 12 31 11 12 31 10 Sales 1,360,000 1,264,000 1,186,000 1,110,000 928,000 146 55 136 21 127 80 119 61 100 00 Cost of Goods Sold 902,000 802,000 752,000 710,000 586,000 153 92 136 86 128 33 121 16 100 00 Gross Profit 458,000 462,000 434,000 400,000 342,000 133 92 135 09 126 90 116 96 100 00 Operating Expenses 234,000 170,000 146,000 144,000 116,000 201 72 146 55 125 86 124 14 100 00 Net Income 224,000 292,000 288,000 256,000 226,000 99 12 129 20 127 43 113 27 100 00 To calcuate the trend percentage for 2014 Sales B4 F4 To calculate the trend percentage for 2013 Sales C4 F4 Common size financial statements are a form of vertical analysis Percentages are calculated for each item on the statement as a percentage of some common base figure on that statement On a common size income statement all items are shown as a percentage of net sales On a common size balance sheet all items are shown as a percentage of total assets The mathematical relationships are all within the calculated year Whenever calculating percentages first determine of what , meaning what is being set equal to 100 Format columns for Accounting (Under Number select Accounting) no $ Format columns for (Under Number select ) 2 decimal places Year Ended 12 31 14 Year Ended 12 31 13 12 31 14 12 31 13 Sales 684,500 538,000 100 00 100 00 When calculating common size percentages set Sales (net) 100 Cost of Goods Sold 468,300 339,500 68 41 63 10 For every other item on the income statement calculate the common size percentage by placing the income statement item in the numerator and Sales in the denominator Gross Profit 216,200 198,500 31 59 36 90 Selling Expenses Sales Salaries Expense 32,500 25,300 4 75 4 70 Depreciation Expense Selling Equip 29,500 27,500 4 31 5 11 For example to calculate the 2014 common size for Cost of Goods Sold cell B6 cell B5 To calculate the 2014 common size for Sales Salaries Expense B9 B5 Rent Expense Sales 41,000 39,000 5 99 7 25 Advertising Expense 38,400 25,000 5 61 4 65 Total Selling Expense 141,400 116,800 20 66 21 71 Administrative Expenses 26,700 24,500 3 90 4 55 Interest Expense 10,100 12,200 1 48 2 27 Income before Income Taxes 38,000 45,000 5 55 8 36 Income Tax Expense 11,100 13,500 1 62 2 51 Net Income 26,900 31,500 3 93 5 86 Common size financial statements are a form of vertical analysis Percentages are calculated for each item on the statement as a percentage of some common base figure on that statement On a common size income statement all items are shown as a percentage of net sales On a common size balance sheet all items are shown as a percentage of total assets The mathematical relationships are all within the calculated year Whenever calculating percentages first determine of what , meaning what is being set equal to 100 Format columns for Accounting (Under Number select Accounting) no $ Format columns for (Under Number select ) 2 decimal places Year Ended 12 31 14 Year Ended 12 31 13 12 31 14 12 31 13 Assets When calculating common size set Total assets 100 Current assets Cash $ 30,000 $ 40,000 3 45 4 00 For example to calculate the 2014 common size for Cash cell B7 cell B17 To calculate the 2014 common size for Marketable securities B8 B17 Marketable securities 10,000 10,000 1 15 1 00 Accounts receivable (net) 170,000 200,000 19 54 20 00 Inventory 160,000 180,000 18 39 18 00 Prepaid expenses 30,000 20,000 3 45 2 00 Total current assets 400,000 450,000 45 98 45 00 Investments (long term) 20,000 50,000 2 30 5 00 Plant and equipment 1,000,000 1,100,000 114 94 110 00 For every other item on the balance sheet calculate the common size percentage by placing the balance sheet item in the numerator and Total Assets in the denominator Less Accumulated depreciation (550,000) (600,000) 63 22 60 00 Net plant and equipment 450,000 500,000 51 72 50 00 Total assets $ 870,000 $ 1,000,000 100 00 100 00 Liabilities and Sotckholders' Equity Current liabilities Accounts payable $ 45,000 $ 80,000 5 17 8 00 Notes payable 100,000 100,000 11 49 10 00 Accrued expenses 35,000 30,000 4 02 3 00 Total current liabilities 180,000 210,000 20 69 21 00 Long term liabilities Bonds payable,2017 40,000 90,000 4 60 9 00 Total liabilities 220,000 300,000 25 29 30 00 Stockholders' equity Preferred stock, $100 par 50,000 50,000 5 75 5 00 Common stock, $1 par 100,000 100,000 11 49 10 00 Retained earnings 250,000 250,000 28 74 25 00 Capital paid in excess of par 250,000 300,000 28 74 30 00 Total stockholders' equity 650,000 700,000 74 71 70 00 Total liabilities and stockholders' equity $ 870,000 $ 1,000,000 100 00 100 00

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Trend percentages are a form of horizontal analysis, showing change across time. Percentages are calculated for each item on the statement as a percentage of

Trend percentages are a form of horizontal analysis, showing change across time. Percentages are calculated for each item on the statement as a percentage of that item in the base year. The earliest period is the base year, which is set equal to 100%.

Trend Percentages

12/31/14

12/31/13

12/31/12

12/31/11

12/31/10

12/31/14

12/31/13

12/31/12

12/31/11

12/31/10

Sales

1,360,000

1,264,000

1,186,000

1,110,000

928,000

146.55%

136.21%

127.80%

119.61%

100.00%

Cost of Goods Sold

902,000

802,000

752,000

710,000

586,000

153.92%

136.86%

128.33%

121.16%

100.00%

Gross Profit

458,000

462,000

434,000

400,000

342,000

133.92%

135.09%

126.90%

116.96%

100.00%

Operating Expenses

234,000

170,000

146,000

144,000

116,000

201.72%

146.55%

125.86%

124.14%

100.00%

Net Income

224,000

292,000

288,000

256,000

226,000

99.12%

129.20%

127.43%

113.27%

100.00%

To calcuate the trend percentage for 2014 Sales: +B4/F4. To calculate the trend percentage for 2013 Sales: +C4/F4.

Common-size financial statements are a form of vertical analysis. Percentages are calculated for each item on the statement as a percentage of some common base figure on that statement. On a common-size income statement all items are shown as a percentage of net sales. On a common-size balance sheet all items are shown as a percentage of total assets. The mathematical relationships are all within the calculated year.
Whenever calculating percentages first determine "% of what", meaning what is being set equal to 100%
	Format columns for Accounting (Under Number select Accounting) no $		Format columns for % (Under Number select %) 2 decimal places
	Year Ended 12/31/14	Year Ended 12/31/13	12/31/14	12/31/13
Sales	684,500	538,000	100.00%	100.00%	When calculating common size percentages set Sales (net) = 100%
Cost of Goods Sold	468,300	339,500	68.41%	63.10%	For every other item on the income statement calculate the common size percentage by placing the income statement item in the numerator and Sales in the denominator.
Gross Profit	216,200	198,500	31.59%	36.90%
Selling Expenses:
Sales Salaries Expense	32,500	25,300	4.75%	4.70%
Depreciation Expense-Selling Equip	29,500	27,500	4.31%	5.11%	For example to calculate the 2014 common size % for Cost of Goods Sold: + cell B6/cell B5. To calculate the 2014 common-size % for Sales Salaries Expense: +B9/B5
Rent Expense- Sales	41,000	39,000	5.99%	7.25%
Advertising Expense	38,400	25,000	5.61%	4.65%
Total Selling Expense	141,400	116,800	20.66%	21.71%
Administrative Expenses	26,700	24,500	3.90%	4.55%
Interest Expense	10,100	12,200	1.48%	2.27%
Income before Income Taxes	38,000	45,000	5.55%	8.36%
Income Tax Expense	11,100	13,500	1.62%	2.51%
Net Income	26,900	31,500	3.93%	5.86%

Common-size financial statements are a form of vertical analysis. Percentages are calculated for each item on the statement as a percentage of some common base figure on that statement. On a common-size income statement all items are shown as a percentage of net sales. On a common-size balance sheet all items are shown as a percentage of total assets. The mathematical relationships are all within the calculated year.
Whenever calculating percentages first determine "% of what", meaning what is being set equal to 100%
	Format columns for Accounting (Under Number select Accounting) no $		Format columns for % (Under Number select %) 2 decimal places
	Year Ended 12/31/14	Year Ended 12/31/13	12/31/14	12/31/13
Assets					When calculating common size % set Total assets = 100%
Current assets:					When calculating common size % set Total assets = 100%
Cash	$ 30,000	$ 40,000	3.45%	4.00%	For example to calculate the 2014 common size % for Cash: + cell B7/cell B17. To calculate the 2014 common-size % for Marketable securities: +B8/B17
Marketable securities	10,000	10,000	1.15%	1.00%
Accounts receivable (net)	170,000	200,000	19.54%	20.00%
Inventory	160,000	180,000	18.39%	18.00%
Prepaid expenses	30,000	20,000	3.45%	2.00%
Total current assets	400,000	450,000	45.98%	45.00%
Investments (long-term)	20,000	50,000	2.30%	5.00%
Plant and equipment	1,000,000	1,100,000	114.94%	110.00%	For every other item on the balance sheet calculate the common size percentage by placing the balance sheet item in the numerator and Total Assets in the denominator.
Less: Accumulated depreciation	(550,000)	(600,000)	-63.22%	-60.00%
Net plant and equipment	450,000	500,000	51.72%	50.00%
Total assets	$ 870,000	$ 1,000,000	100.00%	100.00%

Liabilities and Sotckholders' Equity
Current liabilities:
Accounts payable	$ 45,000	$ 80,000	5.17%	8.00%
Notes payable	100,000	100,000	11.49%	10.00%
Accrued expenses	35,000	30,000	4.02%	3.00%
Total current liabilities	180,000	210,000	20.69%	21.00%
Long-term liabilities
Bonds payable,2017	40,000	90,000	4.60%	9.00%
Total liabilities	220,000	300,000	25.29%	30.00%
Stockholders' equity
Preferred stock, $100 par	50,000	50,000	5.75%	5.00%
Common stock, $1 par	100,000	100,000	11.49%	10.00%
Retained earnings	250,000	250,000	28.74%	25.00%
Capital paid in excess of par	250,000	300,000	28.74%	30.00%
Total stockholders' equity	650,000	700,000	74.71%	70.00%
Total liabilities and stockholders' equity	$ 870,000	$ 1,000,000	100.00%	100.00%