Interpreting Horizontal Analysis results Income Statement ($M) Net Sales Cost of Goods Sold Gross Profit SG&A Expenses 2021 2020 220.80 123.50 97.30 55.30 42.00 10.20 11.90 19.90 % Change 13.4% 6.8% 21.7% 18.4% 26.1% 30.4% 5.9% 35.9% 250.40 131.95 118.45 65.50 Operating Income 52.95 Interest Expense 13.30 Income Tax Expense 12.60 Net Income 27.05 You have been analyzing your company's performance over the past few years and decided to conduct a horizontal analysis. Your results are above. 1. Some of the results are causing you concern. What are these and why do they concern you? 2. What caused your Net Income to increase so much more than the increase in Net Sales?
Interpreting Horizontal Analysis results Income Statement ($M) Net Sales Cost of Goods Sold Gross Profit SG&A Expenses 2021 2020 220.80 123.50 97.30 55.30 42.00 10.20 11.90 19.90 % Change 13.4% 6.8% 21.7% 18.4% 26.1% 30.4% 5.9% 35.9% 250.40 131.95 118.45 65.50 Operating Income 52.95 Interest Expense 13.30 Income Tax Expense 12.60 Net Income 27.05 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?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:Interpreting Horizontal Analysis results
% Change
250.40
13.4%
131.95
6.8%
118.45
21.7%
65.50
18.4%
Operating Income
52.95
26.1%
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?
Income Statement ($M)
Net Sales
Cost of Goods Sold
Gross Profit
SG&A Expenses
2021
2020
220.80
123.50
97.30
55.30
42.00
10.20
11.90
19.90
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education