Prepare a horizontal analysis

Knirsfla Imports has total shareholders’ equity of $1,298,000 on September 30, 2010. The company issues only no-par common stock and had 300,000 shares outstanding on that date. During the fiscal year ended September 30, 2010, the company earned net income of $186,600 and paid dividends totaling $67,800. The stock was selling for $15 per share. Compute the following:

A. Return on common equity

B. Dividend payout ratio

C. Earnings per share

D. Price-earnings ratio

E. Dividend yield

Refer to Walt Disney Company (www.disney.com), and find the most recent annual report.

Required:

A. Prepare a vertical analysis.

B. Prepare a horizontal analysis.

C. Comment on any trends you see.

Refer to PepsiCo Corporation (www.pepsico.com), and find the most recent annual report.

Required:

A. Prepare a vertical analysis.

B. Prepare a horizontal analysis.

C. Comment on any trends you see.

Solution: