Portofino Company Provides the Following Comparative Income Statement Data

question 40

Essay

Portofino Company provides the following comparative income statement data. Please complete a horizontal analysis using the format shown here:
$\begin{array}{|l|r|r|r|}\hline&&&\text {Amount of}\\&&&\text {Increase}\\ \text { (Dollar cmounts in millions) } & 2014 & 2013 & \text { (Decrease) } & \text { Percentage } \\ \hline \text { Revenues } & \$ 6,355 & \$ 4,920 \\\hline \text { Cost of revenues } & 3,370 & 2,200 \\\hline \text { Gross Profit } & 2,985 & 2,720 \\\hline \text { Operating expenses: } & & \\\hline \text { Sales and marketing expense } & 675 & 580 \\\hline \text { General and administrative expense } & 410 & 425 \\\hline \text { Research and development expense } & 470 & 390 \\\hline \text { Other expense } & 400 & 695 \\\hline \text { Total operating expenses } & \$ 1,955 & \$ 2,090 \\\hline & & \\\hline \text { Income before income tax } & \$ 1,030 & \$ 630 \\\hline \text { Income tax expense } & 230 & 210 \\\hline \text { Net income (loss) } & \$ 800 & \$ 420 \\\hline\end{array}$

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