Direction: Read the following independent cases given below. Provide necessary answer for all issuesbeing asked. Provide a separate answer sheet for all your specific answers.A. The DIGITAL Company provided you with the following comparative Income Statement for youranalysis. He wants you to enlighten the management on why the net profit decline.SalesCost of SalesGross MarginOperating ExpensesNet Profit2020P680,000170,000P510,000210,000P3000002021P 570,000200,000P 370,000100,000P 270.000Required:1. Using Horizontal Analysis, calculate the peso change and the percentage changes.2. Using Vertical Analysis, prepare the comparative common-size Income Statements.3. Evaluate the results of your Analysis and explain to the management why the net profit declined.

In accounting we often do horizontal analysis and vertical analysis of financial statements. This…

1. Using Horizontal Analysis, calculate the peso change and the percentage changes. 2. Using Vertical Analysis, prepare the comparative common-size Income Statements. 3. Evaluate the results of your Analysis and explain to the management why the net profit declined

1. Using Horizontal Analysis, calculate the peso change and the percentage changes. 2. Using Vertical Analysis, prepare the comparative common-size Income Statements. 3. Evaluate the results of your Analysis and explain to the management why the net profit declined

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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