The Jiffy Corporation Data for the Current Year - What Would a Horizontal Analysis Report with Respect to

question 121

Multiple Choice

The Jiffy Corporation data for the current year: $\begin{array}{|l|c|c|}\hline \text { Account } & \text { Current year } & \text { Prior year }\\\hline \text { Current assets } & \$ 72,000 & \$ 60,000 \\\hline \text { A/R } & \$ 49,500 & \$ 45,000 \\\hline \text { Mdse. Inventory } & \$ 56,000 & \$ 40,000 \\\hline \text { Current liabilities } & \$ 63,250 & \$ 55,000 \\\hline \text { Long-term liabilities } & \$ 31,500 & \$ 30,000 \\\hline \text { Common stock (5,000 shares) } & \$ 54,000 & \$ 40,000 \\\hline \text { Retained earnings } & \$ 28,750 & \$ 20,000 \\\hline \text { Net sales revenue } & \$ 565,600 & \$ 505,000 \\\hline \text { COGS } & \$ 454,250 & \$ 395,000 \\\hline \text { Gross Profit } & \$111,350 & \$ 110,000 \\\hline \text { Selling/General expenses } & \$46,800 & \$ 52,000 \\\hline \text { Net income before taxes } & \$ 64,550 & \$ 58,000 \\\hline \text { Income tax expense } & \$ 19,250 & \$ 17,500 \\\hline \text { Net Income } & \$ 45,300&\$40,000\\\hline\end{array}$


- What would a horizontal analysis report with respect to net income before income tax expense and net income?

• A)Both net income before tax expense and net income were 8.01% of net sales revenue.
• B)Both net income before income tax expense and net income increased by $85,800.
• C)There was an increase in both net income before income tax expense and net income of 11.85%.
• D)The current ratio is: 1:14.

---

Definitions:

Osmotic Diuretics

Substances that increase urine output by attracting and retaining water in the renal tubules.

ADH Inhibitors

Substances that reduce the effect or production of antidiuretic hormone, leading to increased urine output.

Plasma Clearance

The volume of plasma from which a substance is completely removed per unit time, indicating the efficiency of elimination by the kidneys or other body systems.

Inulin

A type of soluble fiber found in various plants, used as a dietary fiber and sometimes for testing kidney function.