Chapter 11
Financial Statement Analysis
564
Required
a) Use the horizontal analysis techniques to compare the changes between the 2016 and
2015 balance sheet items.
Abaya Inc.
Balance Sheet
As at December 31, 2016
2016
2015 $ Change % Change
Current Assets
Cash
$315,000
$325,000
Accounts Receivable
140,000
198,000
Inventory
411,000
397,000
Short-Term Investments
115,000
100,000
Total Current Assets
981,000
1,020,000
Non-Current Assets
356,000
250,000
Total Assets
$1,337,000 $1,270,000
Current Liabilities
214,000
265,000
Non-Current Liabilities
22,000
150,000
Total Liabilities
236,000
415,000
Shareholders’ Equity
1,101,000
855,000
Total Liabilities and Shareholders’ Equity
$1,337,000 $1,270,000
b) Using 2014 as a base year, provide horizontal analysis of Sales, Gross Profit, Operating
Expenses and Net Income.
2016
2015
2014
Sales
Gross Profit
Operating Expenses
Net Income
