BRIEF EXERCISE 13-4

Horizontal analysis: | | | | | | Increaseor (Decrease) | | | | | | | | | | | | Dec. 31, 2012 | | Dec. 31, 2011 | | Amount | | Percentage* | | | | | | | | | | Accounts receivableInventoryTotal assets | | $ 460,000$ 780,000$3,164,000 | | $ 400,000$ 650,000$2,800,000 | | $ 60,000$130,000$364,000 | | 15%20%13% |

= .15 = .20 = .13

BRIEF EXERCISE 13-5

Vertical analysis: | | Dec. 31, 2012 | | Dec. 31, 2011 | | | | | | | | | | | | Amount | | Percentage* | | Amount | | Percentage** | | | | | | | | | | Accounts receivableInventoryTotal assets | | $ 460,000$ 780,000$3,164,000 | | 14.5%24.7% 100% | | $ 400,000$ 650,000$2,800,000 | | 14.3%23.2% 100% |

= .145 = .143

* = .247 ** = .232

BRIEF EXERCISE 13-6

| | 2012 | | 2011 | | 2010 | | | | | | | | Net income | | $518,400 | | $485,000 | | $500,000 |

| | | Increase or (Decrease) | | | | | | | | | | Amount | | Percentage* | | | | | | | (a)(b) | 2010–20112011–2012 | | ($15,000) $33,400) | | (3%) 7%) |

= (.03) = .07

BRIEF EXERCISE 13-7

| | 2012 | | 2011 | | Increase | | | | | | | | Net income | | $382,800 | | X | | 16% |

.16 = .16X = $382,800 – X 1.16X = $382,800 X = $330,000

2011 Net Income = $330,000

BRIEF EXERCISE 13-8

| | 2012 | | 2011 | | 2010 | | | | | | | | SalesCost of goods soldExpenses Net income | | 100.0 60.5 26.0 13.5 | | 100.0 62.9 26.6 10.5 | | 100.0 64.8 27.5 7.7 |

Net income as a percent of sales for Vallejo increased over the three-year period because cost of goods sold and expenses both decreased as a percent of sales every year.

BRIEF EXERCISE 13-9

Comparing the