Ch.13 final exam

# Ch.13 final exam - ACIS 2115 Chapter 13 Measuring and...

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1 Click to edit Master subtitle style ACIS 2115 Chapter 13 Measuring and Evaluating Financial Performance

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2 Trend Analysis and Ratio Analysis Trend analysis and ratio analysis help users of financial statements understand and evaluate the financial results of business activities.
3 Trend Analysis Used to examine changes in each line item in the financial statements over time Horizontal analysis – compare horizontally across each line item Time-series analysis – compare over a series of time periods

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4 Trend Analysis Calculating Change in Dollar Amounts Dollar Change Current Year Figure Prior Year Figure = Calculating Change as a Percentage Percentage Change Dollar Change Prior Year Figure 100% = × Involves calculating year-over-year dollar and percentage changes.
5 Horizontal Analysis Let’s look at an example using Boston Beer Company, Inc., the producer of Sam Adams…

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6 (in thousands of U.S. dollars) Dec. 29, 2007 Dec. 30, 2006 \$ Change % Change Assets Current Assets 95,489 \$ 82,370 \$ 13,119 \$ 15.9% Accounts Receivable, net 17,972 17,770 202 1.1% Inventories 18,090 17,034 1,056 6.2% Other Current Assets 4,242 3,388 854 25.2% Total Current Assets 135,793 120,562 15,231 12.6% Property and Equipment, net 46,198 30,699 15,499 50.5% Goodwill 1,377 1,377 - 0.0% Other Non-Current Assets 12,487 1,837 10,650 579.7% Total Assets 195,855 \$ 154,475 \$ 41,380 \$ 26.8% Current Liabilities Accounts Payable 17,708 \$ 17,942 \$ (234) \$ -1.3% Accrued Liabilities 40,349 22,928 17,421 76.0% Total Current Liabilities 58,057 40,870 17,187 42.1% Other Non-Current Liabilities 4,210 5,016 (806) -16.1% Total Liabilities 62,267 45,886 16,381 35.7% Contributed Capital 88,896 80,299 8,597 10.7% Accumulated Other Comprehensive Loss (204) (197) (7) 3.6% Retained Earnings 44,896 28,487 16,409 57.6% Total Stockholders' Equity 133,588 108,589 24,999 23.0% Total Liabilities and Stockholders' Equity 195,855 \$ 154,475 \$ 41,380 \$ 26.8% THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES Balance Sheet Liabilities Stockholders' Equity Note \$ and % Changes
7 Horizontal Analysis Look at Percentage Changes in Accounts Across Time Boston Beer’s Cash, Cash Equivalents and S/T Investments increased by 15.9% (\$95,489-\$82,370)/\$82,370 = .159 2007 amount 2006 amount

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8 (in thousands of U.S. dollars) 12/29/2007 12/31/2006 \$ Change % Change Revenue, net of excise taxes 341,647 \$ 285,431 \$ 56,216 \$ 19.7% Cost of Goods Sold 152,288 121,155 31,133 25.7% Gross Profit 189,359 164,276 25,083 15.3% Operating expenses Advertising, promotional and selling 124,457 113,669 10,788 9.5% General and administrative 24,574 22,657 1,917 8.5% Write-off of brewery costs 3,443 - 3,443 - Total Operating Expenses 152,474 136,326 16,148 \$ 11.8% Income from Operations 36,885 27,950 8,935 32.0% Other income Interest income 4,252 3,143 1,109 35.3% Other income
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Ch.13 final exam - ACIS 2115 Chapter 13 Measuring and...

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