E15.4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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E15.4
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Step 1
Horizontal analysis is prepared to calculate the variance from previous year by showing increase/decrease in each line item for example Revenue growth will be calculated in the horizontal analysis.
Step 2
a.
| Particulars | 2020 | 2019 | Increase (Decrease) | % Change |
| Net sales | 600000 | 500000 | 1,00,000.00 | 20.00% |
| Cost of goods sold | 468000 | 400000 | 68,000.00 | 17.00% |
| Gross profit | 132000 | 100000 | 32,000.00 | 32.00% |
| Operating expenses | 60000 | 54000 | 6,000.00 | 11.11% |
| Net Income | 72000 | 46000 | 26,000.00 | 56.52% |
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