Prepare a Vertical Analysis for the Balance Sheet Data Given

question 27

Essay

Prepare a vertical analysis for the balance sheet data given below.(Round to two decimal places.)
Petals, Inc.
Balance Sheet
December 31, 2019 Assets
Current Assets:
$$\begin{array} { l l } \text { Cash and Cash Equivalents } & \$ 10,000 \\\text { Accounts Receivable, Net } & 15,600 \\\text { Merchandise Inventory } & \underline { 38,000 } \\\text { Total Cument Assets } & 63,600 \\\text { Long-term Invetments } & 15,000 \\\text { Property, Plant, and Equipment, Net } & \$ 195,000 \\\text { Total Assets } & \$ 273,600\end{array}$$ Liabilities
Current Liabilities:
$\begin{array}{ll}\text { Accounts Payable } & \$ 8,500 \\\text { Notes Payable } & \underline{1,400} \\\text { Total Current Liabilities } & 9,900 \\\text { Long-term Liabilities } & \underline{54,000} \\\text { Total Liabilities } & 63,900\end{array}$
Stockholders' Equity
$$\begin{array} { l l } \text { Common Stcck } & 161,000 \\\text { Retained Earnings } & \underline { 48,700 } \\\text { Total Stockholders' Equity } & \underline { 209,700 } \\\text { Total Liabilities and Stockholders' Equity } & \$ 273,600\end{array}$$

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Definitions:

Return on Equity

A measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.

Return on Assets

A financial ratio that measures how efficiently a company uses its assets to generate net income, typically expressed as net income divided by total assets.

Return on Debt

An assessment of the profitability relative to the amount of debt used, often calculated as the interest rate or yield on the debt instrument.

Interest Tax Shields

The reduction in income taxes that results from taking allowable deductions for interest expenses.