1. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 17-1 Trend Analysis and Component Percentages

2. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 2 LESSON 17-1 RATIO ANALYSIS Net IncomeNet SalesStated Ratio ÷= $2,000,000.00÷=10 times (10 to 1 or 10:1) $200,000.00 The stated ratio means net sales is 10 times net income. Net SalesNet IncomePercentage Ratio ÷= $200,000.00÷=.10 or 10%$2,000,000.00 Net income is 10% of sales. Net SalesNet IncomeFractional Ratio ÷= $200,000.00÷=1/10$2,000,000.00 Net income is one-tenth of net sales. page 495

3. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 17-1 page 496 TREND ANALYSIS ON THE INCOME STATEMENT 123 4 Current Year Net Sales$4,767,200.001 –Prior Year Net Sales3,633,000.002 ÷Prior Year Net Sales3,633,000.00 =Increase or Decrease in Net Sales$1,134,200.003 =% Increase or Decrease in Net Sales31.2%4

4. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 17-1 TREND ANALYSIS ON THE STATEMENT OF STOCKHOLDERS’ EQUITY page 497

5. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 17-1 page 498 TREND ANALYSIS ON THE BALANCE SHEET

6. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 17-1 page 498 TREND ANALYSIS ON THE BALANCE SHEET

7. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 17-1 page 499 COMPONENT PERCENTAGES ON THE INCOME STATEMENT

8. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 17-1 page 499 COMPONENT PERCENTAGES ON THE INCOME STATEMENT

9. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 9 LESSON 17-1 COMPONENT PERCENTAGES ON THE STATEMENT OF STOCKHOLDERS’ EQUITY page 500

10. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 10 LESSON 17-1 page 501 COMPONENT PERCENTAGES ON THE BALANCE SHEET

11. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 11 LESSON 17-1 page 501 COMPONENT PERCENTAGES ON THE BALANCE SHEET

12. CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 12 LESSON 17-1 page 502 TERMS REVIEW ratio trend analysis