Perform Horizontal And Vertical Analysis Practice Test

An issuer media company reports the following balance sheet amounts (in $000) at December 31: Total liabilities 20X4 $180,000 and 20X5 $210,000; Total equity 20X4 $220,000 and 20X5 $230,000. Using horizontal analysis and the debt-to-equity ratio, what does the analysis suggest about leverage from 20X4 to 20X5?

A nonissuer retailer reports the following balance sheet amounts (in $000) at December 31: Inventory 20X4 $14,000 and 20X5 $10,500; Total assets 20X4 $70,000 and 20X5 $75,000. Using horizontal analysis of inventory, what trend is indicated from 20X4 to 20X5?