The Comparative Financial Statements of Seward,Inc Which of the Following Would Be Shown on Seward's Horizontal

question 63

Multiple Choice

The comparative financial statements of Seward,Inc.include the following data: $\begin{array}{lrr}&\text { Curyent Year}&\text { Prior Year }\\\text { Income Statement }\\\text { Net Sales Revenue } & \mathbf{2 3 4 , 0 0 0} & \mathbf{1 8 0 , 0 0 0} \\\text { Cost of Goods Sold } & 99,000 & 84,600 \\\text { Operating Expenses } & 70,200 & 57,600 \\\text { Interest Expense } & 6,300 & 6,300 \\\text { Income Tax Expense } & 9,000 & 7,200 \\\text { Net Income } & 49,500 & 24,300\\ \text {Balance Sheet }\\\text { Current Assets } & \mathbf{2 0 7 , 0 0 0} & \mathbf{1 7 1 , 0 0 0} \\\text { Plant, Property and Equipment, Net } & 176,400 & 189,000 \\\text { Current Liabilities } & 81,000 & 68,400 \\\text { Long-Term Liabilities } & 77,400 & 77,400 \\\text { Stockholders' Equity } & 225,000 & 214,200 \\\text { Total Liabilities \& Stockholders' Equity } & 383,400 & 360,000\end{array}$ Which of the following would be shown on Seward's horizontal analysis when calculating percentage changes from the prior year to the current year?

• A)An increase in sales revenue of 23%
• B)An increase in gross profit of 41.5%
• C)An increase in interest expense of 100%
• D)An increase in net income of 57%

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Definitions:

Financial Planning

A comprehensive evaluation and strategy development for an individual's or organization’s financial future, including investments, insurance, savings, and budget management.

Working Capital Decision

Decision making related to managing a company's current assets and liabilities to ensure operational efficiency and financial stability.

Capital Budgeting

The process businesses use to evaluate potential major projects or investments, assessing the value they may add to the company.

Capital Intensity Ratio

A metric that measures the amount of capital needed per unit of output, indicating how capital-intensive a business is.