A horizontal and vertical analysis of the income statement for a retail company selling a wide variety

Question:

A horizontal and vertical analysis of the income statement for a retail company selling a wide variety of general merchandise is shown below:
A horizontal and vertical analysis of the income statement for
A horizontal and vertical analysis of the income statement for

Instructions
(a) How effectively has the company controlled its cost of goods sold over the four-year period?
(b) In a vertical analysis, the company's income before income tax has remained unchanged at 13% of revenue over the four-year period. Yet, in a horizontal analysis, income before income tax has grown 40% over that period of time. Explain how this is possible.
(c) Identify any other key financial statement components that have changed over the four-year period for the company.
(d) Identify any additional information that might be helpful to you in your analysis of this company over the four-year period.

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Related Book For  book-img-for-question

Financial Accounting Tools for Business Decision Making

ISBN: 978-1119368458

7th Canadian edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine

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