| | | 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% | | | | | | | | | | | | | | | | | | | | | | | | | |
