Refer to the information provided in E12-2.
In E12-2

Required:
Prepare a horizontal analysis for 2013 using 2012 as the base year.

FEDERER SPORTS APPAREL Income Statement For the years ended December 31 2013 2012 Sales revenue Cost of goods sold $18,800,000 13,200,000 5,600,000 1,600,000 1,000,000 200,000 1,500,000 1,300,000 450,000 $ 850,000 Gross profit Operating expenses Depreciation expense Inventory write-down Loss (litigation) $15,500,000 7,000,000 8,500,000 1,200,000 1,000,000 Income before tax Income tax expense Net income 300,000 6,000,000 2,000,000 $ 4,000,000