A. The following items were taken from the financial statements of Salley, Inc. over a three year period: Using the horizontal analysis and 2016 as the base year, compute the change in percentages for net sales, cost of goods sold, gross profit, operating expenses and net income. Explain whether the trends are favorable or unfavorable for each item. Item 2018 P Net Sales 825,000 Cost of Goods Sold 630,000 Gross Profit 195,000 Operating Expenses 100,000 Net Income P 95,000 2017 740,000 580,000 160,000 80,000 P 80,000 2016 675,000 535,000 140,000 75,000 P 65,000

A. The following items were taken from the financial statements of Salley, Inc. over a three year period: Using the horizontal analysis and 2016 as the base year, compute the change in percentages for net sales, cost of goods sold, gross profit, operating expenses and net income. Explain whether the trends are favorable or unfavorable for each item. Item 2018 P Net Sales 825,000 Cost of Goods Sold 630,000 Gross Profit 195,000 Operating Expenses 100,000 Net Income P 95,000 2017 740,000 580,000 160,000 80,000 P 80,000 2016 675,000 535,000 140,000 75,000 P 65,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...

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