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Perform a Horizontal Analysis on the Following Information Providing Both

question 95

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Perform a horizontal analysis on the following information providing both the dollar amount and percentage change:
20132012 Cash $500,000$200,000 Accounts receivable 900,000800,000 Inventory 700,000500,000 Long-term assets 2.200.0002.500.000 Total assets $4,300,000$4,000,000\begin{array}{lrr}&2013&2012\\\text { Cash } & \$ 500,000 & \$ 200,000 \\\text { Accounts receivable } & 900,000 & 800,000 \\\text { Inventory } & 700,000 & 500,000 \\\text { Long-term assets } & 2.200 .000 & 2.500 .000\\\text { Total assets }&\$4,300,000&\$4,000,000\\\end{array}

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Definitions:

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Sales Mix

The composition of different products or services sold by a company, affecting its overall profitability.

Fixed Costs

Costs that remain constant regardless of production or sales volumes, including rent, salaries, and insurance costs.

Operating Leverage

A measure of how a company's operating income responds to a change in sales volume, indicating the proportion of fixed versus variable costs.

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