$1$

E$13-3($Algo$)$ Preparing and Interpreting a Schedule for Horizontal and Vertical Analyses $[$LO $13-2,$ LO $133,$ LO $13-5]$

$2\mathrm{.}5$

points

According to the producer price index database maintained by the Bureau of Labor Statistics, the average cost of computer equipment fell $3\mathrm{.}8$ percent between January and December $2018.$

Required:

Conduct a horizontal analysis by calculating the year$-$over$-$year changes in each line item, expressed in dollars and in percentages for the income statement of Computer Tycoon Incorporated for the year ended December $31,2018.$

$2-$a$.$ Conduct a vertical analysis by expressing each line as a percentage of total revenues.

$2-$b$.$ Excluding income tax, interest, and operating expenses, did Computer Tycoon earn more gross profit per dollar of sales in $2018$ compared to $2017?$

Complete this question by entering your answers in the tabs below.

Req $1$

Req $2A$

Req $2B$

Conduct a vertical analysis by expressing each line as a percentage of total revenues. $($Round percentage values to $1$ decimal place.$)$

$\backslash$table$[[$COMPUTER TYCOON, INCORPORATED$],[$Income Statements$],[$For the Year Ended December $31],[,2018,2017],[$Sales Revenue,$$,119,000,\%,$$$,148,500,\%$