| Course | ACCT 370 Financial Statement Analysis (ACCT370) |
|---|---|
| Module/Week | 5 |
| Assignment | Excel Project: Part 3 |
| Paper type | Excel project part with horizontal and vertical analysis |
| Length | about 450 words, 2 double-spaced pages plus title page and references. Course guide: a workbook presenting horizontal (trend) analysis and vertical (common-size) analysis of the selected company's statements and common-size comparisons with competitors, presented here as tables with interpretation |
| Format | APA 7 student paper |
| Points | 50 |
| School | Liberty University Online |
| Program | BS in Accounting |
| Where it sits | Module/Week 5 in Liberty's published ACCT 370 course guide; current sections can differ |
| Updated | October 2026 |
Free sample paper for ACCT 370 Week 5
Horizontal and Vertical Analysis of Crocs, Inc., 2023-2025, With Common-Size Comparisons to Steven Madden and Wolverine
[Student Name]
School of Business, Liberty University
ACCT 370: Financial Statement Analysis
Excel Project: Part 3
[Instructor Name]
[Date]
All amounts and percentages are calculated from the companies' Form 10-K filings; the interpretation is written for this sample.
Horizontal and Vertical Analysis of Crocs, Inc., 2023-2025, With Common-Size Comparisons to Steven Madden and Wolverine
Horizontal Analysis of the Income Statement (2023 base)
| Line | 2023 ($000) | 2025 ($000) | Change 2024 | Change 2025 | Two-year change |
|---|---|---|---|---|---|
| Revenues | 3,962,347 | 4,040,647 | 3.5% | (1.5%) | 2.0% |
| Cost of sales | 1,752,337 | 1,683,592 | (3.5%) | (0.5%) | (3.9%) |
| Gross profit | 2,210,010 | 2,357,055 | 9.1% | (2.2%) | 6.7% |
| Selling, general and administrative | 1,163,940 | 1,469,425 | 17.2% | 7.7% | 26.2% |
| Income from operations | 1,036,783 | 149,515 | (1.4%) | (85.4%) | (85.6%) |
| Interest expense | 161,351 | 88,287 | (32.3%) | (19.2%) | (45.3%) |
| Income before income taxes | 876,272 | 72,978 | 3.9% | (92.0%) | (91.7%) |
| Net income (loss) | 792,566 | (81,198) | 19.9% | not meaningful | not meaningful |
Revenue was nearly flat across the period, and gross profit grew faster than revenue in 2024 because cost of sales fell. The striking line is SG&A. Crocs's 10-K attributes the 2025 increase of $105.2 million to investment in talent, higher direct-to-consumer costs, more marketing and $13.4 million for a workforce reduction (Crocs, Inc., 2026). Operating income fell in 2024, a year with no meaningful impairment, because SG&A grew five times as fast as revenue. Interest expense fell by almost half as acquisition debt was repaid, which is a real and lasting improvement.
Common-Size Income Statement (percent of revenues)
| Line | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenues | 100.0% | 100.0% | 100.0% |
| Cost of sales | 44.2% | 41.2% | 41.7% |
| Gross profit | 55.8% | 58.8% | 58.3% |
| Selling, general and administrative | 29.4% | 33.3% | 36.4% |
| Goodwill and asset impairments | 0.2% | 0.6% | 18.3% |
| Income from operations | 26.2% | 24.9% | 3.7% |
| Interest expense | 4.1% | 2.7% | 2.2% |
| Income tax expense (benefit) | 2.1% | (1.0%) | 3.8% |
| Net income (loss) | 20.0% | 23.2% | (2.0%) |
Out of each revenue dollar, Crocs kept 58 cents of gross profit in 2025, three cents more than in 2023, but SG&A took seven cents more. Revsine et al. (2018) caution that margins must be read alongside the cost structure that produces them, and Fairfield and Yohn (2001) found that changes in asset turnover, unlike changes in profit margin, help forecast the next year's change in profitability. For Crocs, the margin compression comes from operating spending, which management controls, rather than from pricing.
Balance Sheet: Trend and Common Size
| Line | 2023 share | 2024 share | 2025 share | Change 2025 |
|---|---|---|---|---|
| Cash and equivalents | 3.2% | 3.8% | 3.1% | (27.8%) |
| Accounts receivable | 6.6% | 5.4% | 6.7% | 8.0% |
| Inventories | 8.3% | 7.4% | 8.8% | 3.5% |
| Total current assets | 19.6% | 18.1% | 21.2% | 1.6% |
| Goodwill | 15.3% | 14.8% | 9.7% | (43.1%) |
| Intangible assets | 38.6% | 36.9% | 31.7% | (25.5%) |
| Total assets | 100.0% | 100.0% | 100.0% | (13.2%) |
| Current liabilities | 15.0% | 15.4% | 16.8% | (5.4%) |
| Long-term borrowings | 35.3% | 28.0% | 29.5% | (8.8%) |
| Total liabilities | 68.7% | 61.9% | 69.0% | (3.2%) |
| Stockholders' equity | 31.3% | 38.1% | 31.0% | (29.5%) |
Total assets fell 13.2% in 2025, nearly all of it from the write-down of goodwill and the HEYDUDE trademark. Intangibles and goodwill together still made up 41.4% of total assets at year-end, so the balance sheet remains dominated by the 2022 acquisition. Equity's share dropped back to 31.0% because the loss and $582.3 million of buybacks reduced it while borrowings fell more slowly. Inventory grew 3.5% while revenue declined 1.5%, a small gap but one to watch in Part 4.
Common-Size Comparison, Fiscal 2025
| Line | Crocs | Steven Madden | Wolverine |
|---|---|---|---|
| Gross profit (% of revenues) | 58.3% | 41.4% | 47.3% |
| Operating expenses (% of revenues) | 54.6% | 38.2% | 39.3% |
| Income from operations (% of revenues) | 3.7% | 3.2% | 8.0% |
| Cash (% of assets) | 3.1% | 5.9% | 12.1% |
| Inventories (% of assets) | 8.8% | 21.8% | 16.0% |
| Goodwill (% of assets) | 9.7% | 13.3% | 25.2% |
| Long-term debt (% of assets) | 29.5% | 12.2% | 32.0% |
| Stockholders' equity (% of assets) | 31.0% | 45.3% | 23.9% |
Steven Madden's assets are mostly working capital: current assets, chiefly inventory and receivables, make up more than half of the balance sheet, which fits a fashion business that buys a new assortment each season. Crocs and Wolverine are both built on acquired brands, with goodwill and intangibles prominent and long-term debt near a third of assets. Steven Madden's operating expenses jumped from 31.2% to 38.2% of revenue in 2025, when it bought Kurt Geiger and paid new duties (Steven Madden, Ltd., 2026). Wolverine's revenue grew 6.8% in a 53-week year, and its operating income rose 54.1% as its expense ratio fell (Wolverine World Wide, Inc., 2026).
Trends Carried Into Part 4
Three trends will shape the projections. First, SG&A has grown faster than revenue for two years, so the forecast must state whether that ratio stabilizes near 36% or reverses. Second, after the impairment the HEYDUDE intangible base is smaller, and no further write-down is assumed unless the brand's revenue keeps falling. Third, Crocs has used most of its free cash flow for debt repayment and buybacks, which shrinks equity and raises reported debt ratios even as borrowings fall. The projected statements will treat each one as an explicit assumption.
References
Crocs, Inc. (2026). Annual report on Form 10-K for the fiscal year ended December 31, 2025. U.S. Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/1334036/000133403626000006/crox-20251231.htm
Fairfield, P. M., & Yohn, T. L. (2001). Using asset turnover and profit margin to forecast changes in profitability. Review of Accounting Studies, 6(4), 371-385. https://doi.org/10.1023/A:1012430513430
Revsine, L., Collins, D. W., Johnson, W. B., Mittelstaedt, H. F., & Soffer, L. C. (2018). Financial reporting and analysis (7th ed.). McGraw-Hill Education.
Steven Madden, Ltd. (2026). Annual report on Form 10-K for the fiscal year ended December 31, 2025. U.S. Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/913241/000162828026012995/shoo-20251231.htm
Wolverine World Wide, Inc. (2026). Annual report on Form 10-K for the fiscal year ended January 3, 2026. U.S. Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/110471/000162828026012614/www-20260103.htm
What the ACCT 370 Week 5 instructions ask
Part 3 of the ACCT 370 Excel project, horizontal and vertical analysis, is submitted in the fifth module/week, the week that covers chapters 10 and 11 of Revsine et al. on long-lived assets and on financial instruments as liabilities, a presentation and Connect Homework 5. Horizontal analysis compares each line of a statement across years, in dollar changes and percentage changes from a base year. Vertical analysis expresses every line as a percentage of a single total, revenues on the income statement and total assets on the balance sheet. Both are built from the Part 1 statements, so the workbook should reference those sheets rather than retype them.
How this ACCT 370 Week 5 example is built
The sample has four tables and interpretation under each. The first is a horizontal analysis of Crocs's income statement, with year-over-year percentage changes for 2024 and 2025 and a two-year change against the 2023 base. The second is a common-size income statement for the same three years. The third combines horizontal and vertical views of the balance sheet. The fourth places Crocs's 2025 common-size statements beside those of Steven Madden and Wolverine. A closing section names the three trends the analysis has found, rising operating costs, a shrinking intangible base and a falling equity share, and states what each means for the projections in Part 4.
ACCT 370 Week 5 grading rubric: where the points go
Instructors mark ACCT 370 Part 3 on correct calculation of dollar and percentage changes from the right base, correct common-size percentages that sum to 100% within each statement, and coverage of both primary statements for the company plus comparisons with competitors. Interpretation weighs heavily: the paragraphs should identify the trends that matter and explain their causes using the company's own filings, rather than listing every line that changed. Clear formatting, with percentages shown to one decimal and negative changes marked, also earns points. A workbook that computes percentages correctly but never says which trends are important leaves points on the table.
ACCT 370 Week 5 help: mistakes that cost points
Choose one base year and keep it; mixing year-over-year changes with changes from the base without labels confuses readers. Avoid percentage changes on lines that switch sign, such as a tax expense that becomes a benefit, and write "not meaningful" instead. Check that each common-size statement adds to 100%. Read the management's discussion section of the 10-K for the causes of large changes; companies explain their own SG&A or margin movements there, and citing that explanation is stronger than guessing. Treat an impairment or acquisition separately so it does not dominate every trend. Then write down the two or three trends you will carry into Part 4's projections. Those trends become the assumptions you defend in Part 4, so stating them now saves rework later.
Related ACCT 370 sample papers
Other ACCT 370 weeks
- ACCT 370 Week 1: Excel Project Part 1
- ACCT 370 Week 2: Discussion Board Forum
- ACCT 370 Week 3: Excel Project Part 2
- ACCT 370 Week 7: Excel Project Part 4
- ACCT 370 Week 8: Financial Analysis Report
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ACCT 370 Week 5 questions, answered
What is ACCT 370 Excel Project Part 3?
The third 50-point piece of the workbook, where students prepare horizontal (trend) and vertical (common-size) analyses of their company's statements and compare them with competitors.
Where can I find a free ACCT 370 Week 5 sample paper?
Scroll up for a finished ACCT 370 Week 5 sample of horizontal and vertical analysis for Crocs, Inc., with common-size comparisons to Steven Madden and Wolverine World Wide.
What is the difference between horizontal and vertical analysis?
Horizontal analysis compares the same line across years in dollars and percentages; vertical analysis expresses each line as a percentage of revenues or total assets within one year.
Why use common-size financial statements?
They remove differences in company size, so a $4 billion company and a $2 billion company can be compared line by line, and they show how a company's cost and funding structure changes over time.
What else is due in ACCT 370 Module/Week 5?
Connect Homework 5 is due with Part 3, along with chapters 10 and 11 of Revsine et al. and the week's presentation.
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