ACC 221 1st Edition Lecture 35 Outline of Last Lecture Section 34 Cash Flow Cont 2 Financial statement o Investing o Retained earnings o Balance sheet Operating investment financing o Non cash activity shown as footnote Outline of Current Lecture Section 35 Red Company Chapters 1 2 Chapter 1 o Income statement and input variables o Balance sheet input variables Chapter 2 o Vertical analysis of income statement o Vertical analysis of balance sheet o Horizontal analysis of income statement o Horizontal analysis of balance sheet Current Lecture Section 35 Red Company Chapters 1 2 Chapter 1 Income Statement and input variables Net sales Cost of goods sold percent helps to determine cost of goods sold Net sales value of this variable 100 cost of goods sold Interest percent notes payable helps to determine interest expense Notes payable long term value of variable 100 interest expense Effective income tax rate percent helps to determine provision for income taxes Pre tax income value of variable 100 provision for income taxes o Balance sheet input variables Number of days sales in A R helps to determined accounts receivable net balance Number of days sales in inventory helps to determine inventory balance Purchase of new equipment Number of days purchases in A P New borrowing pay off Number of new shares of stock issued o These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Cash dividends declared ad paid Number of shares of sock bought back Chapter 2 o Vertical analysis of the income statement Of Net Sales net income net sales x 100 o Vertical analysis of the balance sheet Of total retained earnings total liabilities equity o Horizontal analysis of the income statement Calculate dollar change and percent change for each line of the income statement o Horizontal analysis of the balance sheet Calculate the dollar and percent change for each line of the balance sheet
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