The Following Selected Amounts Were Extracted from the Financial Statements

question 143

Essay

The following selected amounts were extracted from the financial statements of Missinger Corporation.
$$\begin{array}{l}\begin{array} { l l l l } \end{array}\\\begin{array} { l r r r r } &\text { Year } 4 & \text { Year } 3 & \text { Year } 2 & \text { Year } 1\\\text { Net sales } & \$ 720,000 & \$ 690,000 & \$ 660,000 & \$ 600,000 \\\text { Gross margin } & 464,000 & 448,000 & 436,000 & 400,000 \\\text { Net income } & 113,000 & 111,000 & 108,000 & 100,000\end{array}\end{array}$$
a.Prepare a trend analysis for net sales,gross margin,and net income using Year 1 as the base year.
b.For net sales,gross margin,and net income:
1.Calculate the percentage change from Year 1 to Year 2.
2.Calculate the percentage change from Year 2 to Year 3.
c.For each of the four years,compute the percentage relationship of gross margin to net sales and the relationship of net income to net sales.
d.Identify which requirement(s)above involve(s):
1.Horizontal analysis
2.Vertical analysis
Round all answers to the nearest tenth of 1 percent.
a. Prepare a trend analysis for net sales, gross margin, and net income using Year 1 as the base year.
b. For net sales, gross margin, and net income:

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Definitions:

Alfred Adler

Alfred Adler was an Austrian medical doctor and psychotherapist who founded the school of individual psychology and emphasized the importance of feelings of inferiority and the creative self.

Compensation

The act of providing something, often monetary, to make up for a loss, injury, or suffering.

Neurotic Personality

A personality type characterized by a pervasive pattern of emotional instability and anxiety.

Karen Horney

A German psychoanalyst known for her work in the psychology of women and for founding the theory of neurosis based on social and cultural factors, rather than simply biological ones.