Comparative Income Statements for Pearle Company Are Provided Below Required:
Perform a Horizontal Analysis of Pearle Company's Income Statement

question 79

Essay

Comparative income statements for Pearle Company are provided below:
$\begin{array}{c}\text {Pearle Company}\\ \text {Comparative Income Statement}\\\text { Years Ended December 31,}\\\\\begin{array}{lrr}&\text { Year } 2 &\text { Year } 1\\\text { Sales } & \$ 595,000 & \$ 532,200 \\\text { Less cost of goods sold } & 386,200 & 357,650 \\\text { Gross margin } & 208,800 & 174,550 \\\text { Less operating expenses } & 108,950 & 99,770 \\\text { Income before taxes } & 99,850 & 74,780 \\\text { Income taxes } & 39,940 & 29,912 \\\text { Net income } & \$ 59,910 & \$ 44,868\end{array}\end{array}$
Required:
Perform a horizontal analysis of Pearle Company's income statement by computing horizontal percentages for each item.Round your answer to one decimal place (i.e.,22.5%).

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Definitions:

Pairwise Majority Voting

A voting system in which each option is compared head-to-head with every other option, and the option that wins the most comparisons is selected.

Transitivity

The concept in mathematics and logic that if relation "A" is related to "B", and "B" is related to "C", then "A" is related to "C".

Prefers

Indicates a choice or inclination for one option over others based on certain criteria or personal judgment.

Transitivity

In decision theory and economics, the concept that if option A is preferred to B, and B is preferred to C, then A should be preferred to C.