Perform a Horizontal Analysis of the Following Company's Income Statement

question 133

Essay

Perform a horizontal analysis of the following company's income statement. Include both the amount and the percentage of change for each account.
$$\begin{array} { | l | r | r | r | l | } \hline \text { Account } & \mathbf { 2 0 1 1 } & \mathbf { 2 0 1 0 } & \text { Change Amount } & \text { Change Percent } \\\hline \text { Net sales revenue } & \$ 557,000 & \$ 500,000 & & \\\hline \text { Cost of goods sold } & 400,000 & 395,000 & \\\hline \text { Gross profit } & 157,000 & 105,000 & & \\\hline \text { Selling and general expenses } & 70,000 & 50,000 & \\\hline \text { Net income before income tax } & 87,000 & 55,000 & \\\hline \text { Income tax expense } & 24,000 & 16,500 & \\\hline \text { Net income } & \$ 63,000 & \$ 38,500 & & \\\hline\end{array}$$

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Definitions:

Umbilical Cord

A tube that connects the fetus to the placenta.

Phenotype

The actual form or constitution of a person as determined by heredity and environmental factors.

Genotype

The genetic makeup of an organism, consisting of the inherited alleles, that determines its specific traits.

Environmental Influences

External factors, such as climate, geographical location, and social context, that affect living organisms and their development.