Question

Perform a horizontal analysis on the following information providing both the dollar amount and percentage change.

2021 2020
Cash $670,000 $170,000
Accounts receivable 980,000 710,000
Inventory 710,000 520,000
Long-term assets 1,900,000 2,100,000
Total assets $4,260,000 $3,500,000

Required:
Calculate the perctanges for each amounts.

Answer 1

Answer and Explanation:

The computation of the percentage of each amount is as follows;

Particulars         2020               Change               Percentage of change

                                a                         b                         (b ÷ a) × 100

Cash             $170,000       $500,000            294%

Accounts Receivable $710,000 $270,000            38%

Inventory                $520,000    $190,000             37%

Long Term Assets  $2,100,000 -$200,000         -9.52%

Total Assets          $3,500,000   $760,000           21.71%