Q15E - Horngren'S Financial And Managerial Accounting

Question

Theta Designs, Inc. has the following data:

Theta Designs INC
Vertical Analysis
For the year ended December 31, 2017, and 2018
Assets	2018 (\()	2017 (\))
Total current assets	25,000	73,440
Property, Plant and Equipment, Net	153,600	168,300
Other Assets	21,400	64,260
Total Assets	200,000	306,000
Liabilities
Total current liabilities	27,600	49,266
Long term debt	72,400	208,998
Total Liabilities	100,000	258,264
Stockholders’ Equity
Total stockholders’ Equity	100,000	47,736
Total liabilities and stockholders’ equity	200,000	306,000

Perform a vertical analysis of Theta Designs’s balance sheet for each year.

 

Step-by-Step Solution

Answer

The vertical analysis of Theta Designs Inc is prepared for the year 2017 and 2018

Step 1 Definition of Balance Sheet

The balance sheet is defined as a financial statement that reports the value of assets owned and liabilities owes at any specific date.

Step 2 Preparation of Vertical Analysis

Theta Designs INC
Vertical Analysis
For the year ended December 31, 2017, and 2018
Assets	2018 ($)	Percent (%)	2017 ($)	Percent (%)
Total current assets	25,000	12.50	73,440	24
Property, Plant and Equipment, Net	153,600	76.80	168,300	55
Other Assets	21,400	10.70	64,260	21
Total Assets	200,000	100	306,000	100
Liabilities
Total current liabilities	27,600	13.80	49,266	16.10
Long term debt	72,400	36.20	208,998	68.30
Total Liabilities	100,000	50	258,264	84.40
Stockholders’ Equity
Total stockholders’ Equity	100,000	50	47,736	15.60
Total liabilities and stockholders’ equity	200,000	100	306,000	100