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Huffman Trucking

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The analysis team has reviewed the numbers from the income statement and balance sheet for 2010 and 2011 using horizontal, vertical, and ratio analysis to determine Huffman Trucking’s financial position and trends over the past two years. This is a summary of our findings.

Horizontal Analysis
The horizontal analysis evaluates a series of data over time, mainly for intracompany use. An analysis of the 2010/2011 balance sheet data indicates significant increases in cash (54.6%), a decrease in accounts receivables (36.4%), and an increase in long-term debt (11.4%). This indicates that most of the financial expansion of Huffman Trucking was in cash or cash equivalents or by taking on additional long-term debt. The horizontal analysis of the 2020/2011 income statement data shows total operating expenses increased 15.3%, but most of that seems to be related to an increase in fuel expense (23.1%). Additionally, an increase of 14.4% in revenues from the previous year was noted. The steady increases in income improved the company’s ability to obtain debt and equity financing.

Vertical Analysis
Vertical analysis evaluates data in terms of a percent of a base amount. This type of analysis allows for comparison of data to industry competitors of different sizes and industry averages, but can also be used within the company. Analysis of the 2010/2011 balance sheet data shows the percent of cash increased from 22.7% to 33.5% of total assets and the percent of accounts receivables decreased from 31.9% to 19.4% of total assets, suggesting that more revenue was received in the form of cash or cash equivalents than with credit. Vertical analysis of the 2010/2011 income statement data shows significant changes in the percent of salaries, wages and benefits (decrease: 38% of revenue in 2010 to 36.6% in 2011), the percentage of fuel expense (increase: 26.7% of revenue in 2010 to

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