Reliable Moving Company reported the following amounts on its balance sheet as of December 31, 2019 and December 31, 2018: 2019 2018 Cash and Receivables $95,000 $155,000 Merchandise Inventory 225,000 250,000 Property, Plant and Equipment, net 750,000 770,000 Total Assets $1,070,000 $1,175,000 Total Liabilities $465,000 $395,000 For the vertical analysis, what is the percentage of total liabilities for December 31, 2018?

Question

Business

Keon Watts

5 March, 05:49

Reliable Moving Company reported the following amounts on its balance sheet as of December 31, 2019 and December 31, 2018: 2019 2018 Cash and Receivables $95,000 $155,000 Merchandise Inventory 225,000 250,000 Property, Plant and Equipment, net 750,000 770,000 Total Assets $1,070,000 $1,175,000 Total Liabilities $465,000 $395,000 For the vertical analysis, what is the percentage of total liabilities for December 31, 2018?

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Answers (1)

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Kimora Saunders · Answer 1

33.61%

Explanation:

Reliable Moving Company calculation of percentage of total liabilities for December 31, 2018

Using this formula

Vertical analysis % = Specific item / Base amount * 100Vertical analysis %

Where:

Specific item = $395,000

Base amount = $1,175,000

Thus:

= ($395,000 / $1,175,000) * 100Vertical analysis %

=0.33617*100 Vertical analysis %

2018 Percentage of total liabilities = 33.61%