The Following Is a Summary of Information Presented on the Financial

question 51

Essay

The following is a summary of information presented on the financial statements of The Cake Company on December 31, 2014.
What would horizontal analysis report with respect to net income before income tax expense and net income?
A)That both net income before income tax expense and net income are 45.45% of net sales revenue
B)A $25,000 increase in both net income before income tax expense and net income
C)A 45.45% increase in both net income before income tax expense and net income
D)A 145% increase in both net income before income tax expense and net income

• A)That both net income before income tax expense and net income are 45.45% of net sales revenue
• B)A $25,000 increase in both net income before income tax expense and net income
• C)A 45.45% increase in both net income before income tax expense and net income
• D)A 145% increase in both net income before income tax expense and net income

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Definitions:

Delivering Bad News

The practice of communicating unfavorable news or information in a thoughtful, sensitive, and often strategic manner.

Unsolicited Proposal

A proposal submitted by an individual or organization to another entity without being requested or invited to do so, often aiming to offer solutions or services.

External Source

An external source refers to information or data that comes from outside an organization or study, often used to provide additional evidence or benchmarks.

Indirect Approach

A communication method where the main point or request is not presented directly at the beginning but is instead gradually led up to, often used to soften the delivery of less favorable news or requests.