[Get Solution]Ratio Analysis Accounting
For horizontal analysis, create a two-dimensional line chart over three years and for the vertical analysis, create one bar chart over three years for each of the following balance sheet categories: current assets, long-term assets, current liabilities, long-term liabilities, and cash flows from/used by operating, investing and financing activities. For income statement items, group the different streams of revenue, and group the different categories of operating expenses. For cash flow items, separate cash flows from operating, investing and financing activities. Do not try to chart each line item within the operating, investing and financing activities (that level of analysis is outside the scope of this exercise)For ratio analysis, group ratios by liquidity, solvency and profitability ratios and create two dimensional line charts over two or three years for each category, depending on whether the ratio you created covers a two or three year period. Whatever you present, it has to be readable and clear to other users of the information that you produce. Placing more than three or four ratios on one chart over at least three years starts to look a little busy. Make sure you space them adequately for easy reading. If your ratios are too busy looking, your group mates should let you know so you can redo them before submission. Visually, there is a difference between the charts you create for vertical, horizontal and ratio analysis. The vertical analysis will produce a chart for each year for each group of items analyzed, as opposed to the horizontal and ratio analysis which will produce one chart for all the years for each group of items analyzed.
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