The Jiffy Corporation Data for the Current Year - What Would a Horizontal Analysis Report with Respect to

question 137

Multiple Choice

The Jiffy Corporation data for the current year: $\begin{array}{|l|c|c|}\hline \text { Account } & \text { Current year } & \text { Prior year }\\\hline \text { Current assets } & \$ 72,000 & \$ 60,000 \\\hline \text { A/R } & \$ 49,500 & \$ 45,000 \\\hline \text { Mdse. Inventory } & \$ 56,000 & \$ 40,000 \\\hline \text { Current liabilities } & \$ 63,250 & \$ 55,000 \\\hline \text { Long-term liabilities } & \$ 31,500 & \$ 30,000 \\\hline \text { Common stock (5,000 shares) } & \$ 54,000 & \$ 40,000 \\\hline \text { Retained earnings } & \$ 28,750 & \$ 20,000 \\\hline \text { Net sales revenue } & \$ 565,600 & \$ 505,000 \\\hline \text { COGS } & \$ 454,250 & \$ 395,000 \\\hline \text { Gross Profit } & \$111,350 & \$ 110,000 \\\hline \text { Selling/General expenses } & \$46,800 & \$ 52,000 \\\hline \text { Net income before taxes } & \$ 64,550 & \$ 58,000 \\\hline \text { Income tax expense } & \$ 19,250 & \$ 17,500 \\\hline \text { Net Income } & \$ 45,300&\$40,000\\\hline\end{array}$


- What would a horizontal analysis report with respect to current assets?

• A)Inventory turnover of 8.11 times
• B)A 20% increase in current assets
• C)Current ratio of 1.14
• D)Current assets as 40.56% of total assets

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Definitions:

Business Profits

The excess of revenues generated from business activities over the costs incurred in producing those revenues, reflecting the financial success of a business.

Partners

Individuals or entities who share ownership and responsibilities in managing a business or specific venture.

Income

Payments that are regularly collected from employment activities or the investment of funds.

Public Entertainment

Activities designed for the enjoyment of the public, often provided by the government or community organizations, such as concerts or parades.