To perform a horizontal analysis, we calculate the percentage change from one year to the next using the formula:

$\text{Percentage Change} = \left( \frac{\text{Current Year} - \text{Prior Year}}{\text{Prior Year}} \right) \times 100$

Let's evaluate each statement:

A. Total stockholders' equity increased 44.16% from 20X1 to 20X2

$\text{Percentage Change} = \left( \frac{1,110,000 - 770,000}{770,000} \right) \times 100 = \left( \frac{340,000}{770,000} \right) \times 100 = 44.16\%$ This statement is correct.

B. Net income increased 36% from 20X1 to 20X2

$\text{Percentage Change} = \left( \frac{340,000 - 250,000}{250,000} \right) \times 100 = \left( \frac{90,000}{250,000} \right) \times 100 = 36\%$ This statement is correct.

C. The debt ratio for 20X2 is 51.74%

The debt ratio is calculated as: $\text{Debt Ratio} = \frac{\text{Total Liabilities}}{\text{Total Assets}} \times 100$ For 20X2: $\text{Debt Ratio} = \frac{1,190,000}{2,300,000} \times 100 = 51.74\%$ This statement is correct.

D. Current assets increased 50% from 20X1 to 20X2

$\text{Percentage Change} = \left( \frac{330,000 - 220,000}{220,000} \right) \times 100 = \left( \frac{110,000}{220,000} \right) \times 100 = 50\%$ This statement is correct.

E. Total assets increased 17.95% from 20X1 to 20X2

$\text{Percentage Change} = \left( \frac{2,300,000 - 1,950,000}{1,950,000} \right) \times 100 = \left( \frac{350,000}{1,950,000} \right) \times 100 = 17.95\%$ This statement is correct.

Conclusion:

The correct statements are:

• A. Total stockholders' equity increased 44.16%.
• B. Net income increased 36%.
• C. The debt ratio for 20X2 is 51.74%.
• D. Current assets increased 50%.
• E. Total assets increased 17.95%.

Would you like further details or have any questions?

5 related questions:

1. How do we calculate the debt-to-equity ratio, and what is Horizons, Inc.'s ratio for 20X2?
2. What impact would a higher current assets percentage have on liquidity?
3. How does the increase in net income compare to the increase in total sales?
4. What does a 44.16% increase in stockholders' equity indicate about the company's performance?
5. How does horizontal analysis differ from vertical analysis?

Tip:

When analyzing financial data, compare both percentage changes and absolute values to get a clearer picture of a company's growth or decline.