Based on the blow information about ABCDE Technology, Inc. Calculate Using Verti
ID: 2479838 • Letter: B
Question
Based on the blow information about ABCDE Technology, Inc. Calculate Using Vertical analysis and Determine the red flags that exist in this financial statement. Describe the scenarios that might contain these symptoms
ABCDE Technologies, INC.
Balance Sheet December 31, 20X2 &20X1
December 31, 20X1
December 31, 20X2
Assets:
Current Assets:
Cash and Cash equivalents
$6,181,520.00
$970,446.00
Available - for sale securities
$4,932,763.00
$0.00
Accounting receivable, net of allowance for doubtful accounts of $148,300 and $139,200 at December 31,20X1 and 20X2 respectively
$12,592,231.00
$3,932,170.00
Inventories
$18,229,317.00
$8,609,492.00
Other current Assent
$18,229,317.00
$8,609,492.00
Total Current Asset
$60,165,148.00
$22,121,600.00
ABCDE Technologies, INC.
Income Statement for the Period Ending
December 31, 20X1
December 31, 20X2
December 31, 20X3
Sales
$37,847,681.00
$12,445,015.00
$8,213,236.00
Cost of good sold
$15,895,741.00
$6,832,927.00
$4,523,186.00
Gross margin
$21,951,940.00
$5,612,088.00
$3,690,050.00
ABCDE Technologies, INC.
Balance Sheet December 31, 20X2 &20X1
December 31, 20X1
December 31, 20X2
Assets:
Current Assets:
Cash and Cash equivalents
$6,181,520.00
$970,446.00
Available - for sale securities
$4,932,763.00
$0.00
Accounting receivable, net of allowance for doubtful accounts of $148,300 and $139,200 at December 31,20X1 and 20X2 respectively
$12,592,231.00
$3,932,170.00
Inventories
$18,229,317.00
$8,609,492.00
Other current Assent
$18,229,317.00
$8,609,492.00
Total Current Asset
$60,165,148.00
$22,121,600.00
ABCDE Technologies, INC.
Income Statement for the Period Ending
December 31, 20X1
December 31, 20X2
December 31, 20X3
Sales
$37,847,681.00
$12,445,015.00
$8,213,236.00
Cost of good sold
$15,895,741.00
$6,832,927.00
$4,523,186.00
Gross margin
$21,951,940.00
$5,612,088.00
$3,690,050.00
Explanation / Answer
Vertical Analysis of a Balance Sheet December 31, 20X2 &20X1
ABCDE Technologies, INC.Vertical Analysis of a Balance Sheet December 31, 20X2 &20X1
Current Assets: December 31, 20X1 December 31, 20X2 analysis RED FLAGS POINTS SCENARIOS THAT MIGHT CONTAIN THESE SYMTOMS Cash and Cash equivalents $6,181,520.00 $970,446.00 84% DOWN RED FLAG Cash and its equivalents have reduced at higher rate in the all current assets Available - for sale securities $4,932,763.00 $0.00 100% DOWN RED FLAG Due to bad business and financial position all securities have to be sold out. Accounting receivable $12,592,231.00 $3,932,170.00 69% DOWN RED FLAG The receivables are reduced in the proportion of reduction in business or Sales Less:allowance for doubtful accounts $148,300 $139,200 6.50 % UP Recovery in Doubtful accounts have increased Inventories $18,229,317.00 $8,609,492.00 52.75% DOWN These are in least effected current assets in all and reduced in less proportion to Sales Other current Asset $18,229,317.00 $8,609,492.00 52.75% DOWN Other current assets are least effected to Total Current Assets Total Current Asset $60,165,148.00 $22,121,600.00 63.23% DOWNRelated Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.