Two Income Statements for Danielle's Design Services Are Shown Below

question 88

Essay

Two income statements for Danielle's Design Services are shown below:
Danielle's Design Services
Income Statements
For Years 1 and 2 Ending December 31 a) Prepare a vertical analysis of Danielle's Design Services income statements.
b) What types of trends are indicated: favorable or unfavorable?
c) What other information would enhance the analysis?

---

Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Assets and Liabilities

Components of a company's financial statement, where assets represent resources owned and liabilities represent obligations owed.

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period of time, leading to the net profit or loss.

Breakeven Analysis Account

A financial calculation that determines the point at which the cost of producing a product equals the revenue made from selling the product.