Using your ratio, horizonal, and vertical analysis, you are to compare and contrast:
a)
The main similarities and differences across the two companies
b)
Each corporations’ overall financial position and performance based on the ratio and comparative/common-size analysis you performed, and support your comments by making reference to your numbers.
●
In your final paragraph, be sure to identify which corporation is in a better financial position in your opinion. Consider, adding a paragraph that incorporates various financial analysis to support your opinion.
Rabbi Financial Analysis Exam Comparative Balance Sheet As of December 31, 2021 and 2020 Red Ruby CorporationBlue Diamond Corporation ASSETS2021202020212020 Current Assets Cash$ 574,938$ 334,909$ 52,128$ 33,808 Accounts Receivable$ 221,130$ 418,633$ 79,882$ 59,951 Merchandise Inventory$ 1,498,770$ 1,090,623$ 184,373$ 100,639 Prepaid Expenses$ 115,233$ 66,978$ 7,076$ 9,435 Total Current Assets$ 2,410,071$ 1,911,144$ 323,459$ 203,833 Fixed Assets Equipment$ 1,535,281$ 1,426,067$ 406,879$ 426,535 Building$ 2,227,172$ 2,300,882$ 580,245$ 613,267 Land$ 2,734,641$ 2,734,641$ 864,864$ 864,864 Total Fixed Assets$ 6,497,094$ 6,461,591$ 1,851,988$ 1,904,666 Total Assets$ 8,907,166$ 8,372,734$ 2,175,447$ 2,108,499 LIABILITIES Current Liabilities A/P$ 597,592$ 738,098$ 140,501$ 85,071 Bank Loan$ 579,852$ 514,250$ 98,280$ 58,968 Total Current Liabilities$ 1,177,444$ 1,252,348$ 238,781$ 144,039 Long-Term Liabilities Mortgage Payable$ 407,862$ 407,862$ 393,120$ 420,638 Long-Term Bank Loan$ 343,980$ 343,980$ 570,024$ 589,680 Total Long-Term Liabilities$ 751,842$ 751,842$ 963,144$ 1,010,318 Total Liabilities$ 1,929,286$ 2,004,190$ 1,201,925$ 1,154,358 SHAREHOLDER'S EQUITY Common Stock$ 5,749,380$ 5,749,380$ 393,120$ 393,120 Retained Earnings$ 1,228,500$ 619,164$ 580,402$ 561,022 Total Shareholder's Equity$ 6,977,880$ 6,368,544$ 973,522$ 954,142 Total Liabilities and Equity$ 8,907,166$ 8,372,734$ 2,175,447$ 2,108,499 Comparative Income Statement For the periods ending December 31, 2021 and 2020 Red Ruby CorporationBlue Diamond Corporation 2021202020212020 Revenue Net Sales$ 6,879,600$ 6,879,600$ 1,330,790$ 1,279,999 Cost of Goods Sold Inventory, January 1, 2021$ 1,090,623$ 1,351,350$ 100,639$ 87,430 Net Purchases$ 4,545,450$ 4,422,600$ 792,137$ 689,847 Goods Available for Sale$ 5,636,073$ 5,773,950$ 892,776$ 777,277 Less: Inventory, December 31, 2021$ 1,498,770$ 1,090,623$ 184,373$ 100,639 Cost of Goods Sold$ 4,137,303$ 4,683,327$ 708,402$ 676,638 Gross Profit$ 2,742,297$ 2,196,273$ 622,388$ 603,361 Operating Expenses Advertising Expense$ 75,184$ 58,968$ 63,253$ 85,071 Car Expense$ 83,538$ 51,106$ 68,639$ 77,838 Depreciation Expense$ 66,339$ 66,339$ 52,678$ 52,678 Insurance Expense$ 73,710$ 73,710$ 20,049$ 18,870 Interest Expense$ 45,946$ 43,735$ 50,241$ 53,464 Supplies Expense$ 49,140$ 66,339$ 15,725$ 14,899 Telephone Expense$ 7,371$ 7,371$ 5,897$ 5,523 Utilities Expenses$ 9,828$ 9,828$ 20,442$ 18,673 Wages Expense$ 1,523,340$ 1,326,780$ 167,705$ 141,814 Total Operating Expenses$ 1,934,396$ 1,704,175$ 464,629$ 468,831 Net Income before taxes$ 807,901$ 492,098$ 157,759$ 134,530 Taxes$ 185,817$ 113,182$ 36,285$ 30,942 Net Income after taxes$ 622,084$ 378,915$ 121,474$ 103,588 DELTA CORPORATION BALANCE SHEET As at Dec.31, 2021 ASSETS Bank A/R Supplies General Equipment Automotive Equipment Total Assets LIABILITIES A/P Bank Loan SHAREHOLDER'S EQUITY Capital Stock - Common 5,000 shares, no par value Capital Stock - Preferred $2 1,000 shares, no par value Retained Earnings Total Liabilities and Equity Common size Financial Analysis Exam Comparative Balance Sheet As of December 31, 2021 and 2020 Red Ruby Corporationcs% 2021Cs% 2020Blue Diamond Corporationcs% 2021Cs% 2020 ASSETS2021202020212020 Current Assets Cash$ 574,938$ 334,9096.45%4.00%$ 52,128$ 33,8082.40%1.60% Accounts Receivable$ 221,130$ 418,6332.48%5.00%$ 79,882$ 59,9513.67%2.84% Merchandise Inventory$ 1,498,770$ 1,090,62316.83%13.03%$ 184,373$ 100,6398.48%4.77% Prepaid Expenses$ 115,233$ 66,9781.29%0.80%$ 7,076$ 9,4350.33%0.45% Total Current Assets$ 2,410,071$ 1,911,14427.06%22.83%$ 323,459$ 203,83314.87%9.67% Fixed Assets Equipment$ 1,535,281$ 1,426,06717.24%17.03%$ 406,879$ 426,53518.70%20.23% Building$ 2,227,172$ 2,300,88225.00%27.48%$ 580,245$ 613,26726.67%29.09% Land$ 2,734,641$ 2,734,64130.70%32.66%$ 864,864$ 864,86439.76%41.02% Total Fixed Assets$ 6,497,094$ 6,461,59172.94%77.17%$ 1,851,988$ 1,904,66685.13%90.33% Total Assets$ 8,907,166$ 8,372,734100.00%100.00%$ 2,175,447$ 2,108,499100.00%100.00% LIABILITIES Current Liabilities A/P$ 597,592$ 738,0986.71%8.82%$ 140,501$ 85,0716.46%4.03% Bank Loan$ 579,852$ 514,2506.51%6.14%$ 98,280$ 58,9684.52%2.80% Total Current Liabilities$ 1,177,444$ 1,252,34813.22%14.96%$ 238,781$ 144,03910.98%6.83% Long-Term Liabilities Mortgage Payable$ 407,862$ 407,8624.58%4.87%$ 393,120$ 420,63818.07%19.95% Long-Term Bank Loan$ 343,980$ 343,9803.86%4.11%$ 570,024$ 589,68026.20%27.97% Total Long-Term Liabilities$ 751,842$ 751,8428.44%8.98%$ 963,144$ 1,010,31844.27%47.92% Total Liabilities$ 1,929,286$ 2,004,19021.66%23.94%$ 1,201,925$ 1,154,35855.25%54.75% SHAREHOLDER'S EQUITY Common Stock$ 5,749,380$ 5,749,38064.55%68.67%$ 393,120$ 393,12018.07%18.64% Retained Earnings$ 1,228,500$ 619,16413.79%7.40%$ 580,402$ 561,02226.68%26.61% Total Shareholder's Equity$ 6,977,880$ 6,368,54478.34%76.06%$ 973,522$ 954,14244.75%45.25% Total Liabilities and Equity$ 8,907,166$ 8,372,734100.00%100.00%$ 2,175,447$ 2,108,499100.00%100.00% Comparative Income Statement For the periods ending December 31, 2021 and 2020 Red Ruby CorporationBlue Diamond Corporation 20212020100%20212020 Revenue Net Sales$ 6,879,600$ 6,879,600100.00%100.00%$ 1,330,790$ 1,279,999100%100.00% Cost of Goods Sold Inventory, January 1, 2021$ 1,090,623$ 1,351,350100.00%100.00%$ 100,639$ 87,430100%100.00% Net Purchases$ 4,545,450$ 4,422,600100.00%100.00%$ 792,137$ 689,847100%100.00% Goods Available for Sale$ 5,636,073$ 5,773,950100.00%100.00%$ 892,776$ 777,277100%100.00% Less: Inventory, December 31, 2021$ 1,498,770$ 1,090,623100.00%100.00%$ 184,373$ 100,639100%100.00% Cost of Goods Sold$ 4,137,303$ 4,683,327100.00%100.00%$ 708,402$ 676,638100%100.00% Gross Profit$ 2,742,297$ 2,196,273100.00%100.00%$ 622,388$ 603,361100%100.00% Operating Expenses Advertising Expense$ 75,184$ 58,968100.00%100.00%$ 63,253$ 85,071100%100.00% Car Expense$ 83,538$ 51,106100.00%100.00%$ 68,639$ 77,838100%100.00% Depreciation Expense$ 66,339$ 66,339100.00%100.00%$ 52,678$ 52,678100%100.00% Insurance Expense$ 73,710$ 73,710100.00%100.00%$ 20,049$ 18,870100%100.00% Interest Expense$ 45,946$ 43,735100.00%100.00%$ 50,241$ 53,464100%100.00% Supplies Expense$ 49,140$ 66,339100.00%100.00%$ 15,725$ 14,899100%100.00% Telephone Expense$ 7,371$ 7,371100.00%100.00%$ 5,897$ 5,523100%100.00% Utilities Expenses$ 9,828$ 9,828100.00%100.00%$ 20,442$ 18,673100%100.00% Wages Expense$ 1,523,340$ 1,326,780100.00%100.00%$ 167,705$ 141,814100%100.00% Total Operating Expenses$ 1,934,396$ 1,704,175100.00%100.00%$ 464,629$ 468,831100%100.00% Net Income before taxes$ 807,901$ 492,098100.00%100.00%$ 157,759$ 134,530100%100.00% Taxes$ 185,817$ 113,182100.00%100.00%$ 36,285$ 30,942100%100.00% Net Income after taxes$ 622,084$ 378,915100.00%100.00%$ 121,474$ 103,588100%100.00% DELTA CORPORATION BALANCE SHEET As at Dec.31, 2021 ASSETS Bank A/R Supplies General Equipment Automotive Equipment Total Assets LIABILITIES A/P Bank Loan SHAREHOLDER'S EQUITY Capital Stock - Common 5,000 shares, no par value Capital Stock - Preferred $2 1,000 shares, no par value Retained Earnings Total Liabilities and Equity comprative Financial Analysis Exam Comparative Balance Sheet As of December 31, 2021 and 2020 Red Ruby CorporationBlue Diamond Corporation ASSETS20212020$ Change % Change 20212020$ change$ change Current Assets Cash$ 574,938$ 334,909$240,028.6571.67%$ 52,128$ 33,808$ 18,31954.19% Accounts Receivable$ 221,130$ 418,633-$197,503.49-47.18%$ 79,882$ 59,951$ 19,93133.25% Merchandise Inventory$ 1,498,770$ 1,090,623$408,147.0137.42%$ 184,373$ 100,639$ 83,73583.20% Prepaid Expenses$ 115,233$ 66,978$48,255.4872.05%$ 7,076$ 9,435$ (2,359)-25.00% Total Current Assets$ 2,410,071$ 1,911,144$498,927.6626.11%$ 323,459$ 203,833$ 119,62658.69% $0.00ERROR:#DIV/0!$ - 0ERROR:#DIV/0! Fixed Assets$0.00ERROR:#DIV/0!$ - 0ERROR:#DIV/0! Equipment$ 1,535,281$ 1,426,067$109,213.657.66%$ 406,879$ 426,535$ (19,656)-4.61% Building$ 2,227,172$ 2,300,882-$73,710.00-3.20%$ 580,245$ 613,267$ (33,022)-5.38% Land$ 2,734,641$ 2,734,641$0.000.00%$ 864,864$ 864,864$ - 00.00% Total Fixed Assets$ 6,497,094$ 6,461,591$35,503.650.55%$ 1,851,988$ 1,904,666$ (52,678)-2.77% $0.00ERROR:#DIV/0!$ - 0ERROR:#DIV/0! Total Assets$ 8,907,166$ 8,372,734$534,431.316.38%$ 2,175,447$ 2,108,499$ 66,9483.18% $0.00$ - 0ERROR:#DIV/0! LIABILITIES$0.00ERROR:#DIV/0!$ - 0ERROR:#DIV/0! Current Liabilities$0.00ERROR:#DIV/0!$ - 0ERROR:#DIV/0! A/P$ 597,592$ 738,098-$140,506.00-19.04%$ 140,501$ 85,071$ 55,43065.16% Bank Loan$ 579,852$ 514,250$65,601.9012.76%$ 98,280$ 58,968$ 39,31266.67% Total Current Liabilities$ 1,177,444$ 1,252,348-$74,904.10-5.98%$ 238,781$ 144,039$ 94,74265.78% $0.00ERROR:#DIV/0!$ - 0ERROR:#DIV/0! Long-Term Liabilities$0.00ERROR:#DIV/0!$ - 0ERROR:#DIV/0! Mortgage Payable$ 407,862$ 407,862$0.000.00%$ 393,120$ 420,638$ (27,518)-6.54% Long-Term Bank Loan$ 343,980$ 343,980$0.000.00%$ 570,024$ 589,680$ (19,656)-3.33% Total Long-Term Liabilities$ 751,842$ 751,842$0.000.00%$