Interpreting Horizontal Analysis results Income Statement ($M) Net Sales Cost of Goods Sold Gross Profit SG&A Expenses 2021 250 40 131.95 118.45 2020 65.50 52.95 220 80 123 50 97.30 55.30 42.00 % Change 13.4% 6.8% 21,7% 18.4% Operating Income 26.1% Interest Expense 13.30 10 20 30.4% Income Tax Expense 12.60 11 90 5.9% Net Income 27.05 19.90 35.9% You have been analyzing your company's performance over the past few years and decided to conduct a horizontal analysis Your results are above. 1. Some of the results are causing you concern What are these and why do they concern you? What caused your Net Income to increase so much more than the increase in Net Sales?
Interpreting Horizontal Analysis results Income Statement ($M) Net Sales Cost of Goods Sold Gross Profit SG&A Expenses 2021 250 40 131.95 118.45 2020 65.50 52.95 220 80 123 50 97.30 55.30 42.00 % Change 13.4% 6.8% 21,7% 18.4% Operating Income 26.1% Interest Expense 13.30 10 20 30.4% Income Tax Expense 12.60 11 90 5.9% Net Income 27.05 19.90 35.9% You have been analyzing your company's performance over the past few years and decided to conduct a horizontal analysis Your results are above. 1. Some of the results are causing you concern What are these and why do they concern you? What caused your Net Income to increase so much more than the increase in Net Sales?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Interpreting Horizontal Analysis results
Income Statement ($M)
Net Sales
Cost of Goods Sold
Gross Profit
SG&A Expenses
2021
2020
220 80
123 50
9730
55.30
42.00
10 20
% Change
13.4%
6.8%
21.7%
18.4%
26.1%
250 40
131.95
118.45
65.50
Operating Income
52.95
Interest Expense
13.30
30.4%
Income Tax Expense
12.60
5.9%
Net Income
27.05
35.9%
You have been analyzing your company's performance over the past few years and decided to conduct a horizontal analysis Your
results are above.
1. Some of the results are causing you concern What are these and why do they concern you?
2 What caused your Net Income to increase so much more than the increase in Net Sales?
11.90
19.90
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