The assignment is Chapter 4 Exercises and Problems 1,2,3,6&7.

Chapter 4 – Analysis of Financial Statements
1. Samantha Knight is applying for a small-business loan. She provides the bank with the following information: cash in checking accounts, $5,000; cash in savings, $10,350; home market value, $145,500; first mortgage on house, $25,000; home equity loan limit, $70,000; home equity loan, $10,000; automobile market value, $19,000; automobile loan outstanding, $15,000; credit card debt, $1,500.
(a)
    Cash in checking accounts
    5000
    Cash in savings accounts
    10350
    Home market value
    145500
    First mortgage on house
    25000
    Home equity loan limit
    70000
    Home equity loan
    10000
    Automobile market value
    19000
    Automobile loan outstanding
    15000
    Credit card debt
    1500
     
     
    Debt to Asset Ratio = Total Debt / Total Assets
    (51500/ 179850) = 0.29
    Debt
    Amount
    Assets
    Amount
    Mortgage
    25000
    Checking
    5000
    Home Equity
    10000
    Savings
    10350
    Automobile
    15000
    Home
    145500
    Credit
    1500
    Automobile
    19000
    Total Debt
    51500
    Total Assets
    179850
(b)
    Total Assets
    179850
    Total Debt
    51500
    Total Equity
    128350
    Debt to Equity Ratio = Total Debt / Total Equity
    (51500/ 128350) = 0.40
(c) What percentage of Samantha assets are owned by others?
This percentage will be similar to debt to asset ratio which is (51500/ 179850) = 28.63%.
2. You receive the following partial balance sheet (Table 4-5) page 118 for 2012 and 2013 for a company that you are considering investing in. Perform a vertical analysis for each year on these accounts. Compare the two years, and in a sentence describe those changes that were beneficial or detrimental to this company.
    Particulars
    2012
    2012 (%)
    2013
    2013 (%)
    Current Assets
    7000000
    46.67%
    9000000
    60.00%
    Total Fixed Assets
    8000000
    53.33%
    6000000
    40.00%
    Total Assets
    15000000
    100.00%
    15000000
    100.00%
    Current Liabilities
    3000000
    20.00%
    1000000
    6.67%
    Long Term Debt
    4000000
    26.67%
    4000000
    26.67%
    Owner's Equity
    8000000
    53.33%
    10000000
    66.67%
    Total Liabilities & Owner's Equity
    15000000
    100.00%
    15000000
    100.00%
Workings:
    Particulars
    2012
    2012 (%)
    2013
    2013 (%)
    Current Assets
    7000000
    =7000000/15000000
    9000000
    =9000000/15000000
    Total Fixed Assets
    8000000
    =8000000/1500000
    6000000
    =6000000/15000000
    Total Assets
    15000000
    =15000000/15000000
    15000000
    =15000000/15000000
    Current...