1 Exercise 9-3A (Algo) Horizontal and vertical analysis LO 9-1 8 points Income statements for Perez Company for Year 3 and Year 4 follow: eBook PEREZ COMPANY Income Statements Year 4 Sales $200,800 Cost of goods sold 143,300 Selling expenses 21,600 Administrative expenses 12,800 Interest expense 3,100 Total expenses $180, 800 Income before taxes 20,000 Income taxes expense 6,400 Net income $ 13,600 Year 3 $180,800 121,300 19,600 14,800 5, 100 $160,800 20,000 4,000 $ 16,000 Hint Print Required a. Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. References Required A Required B Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. (Negative answers should be indicated by a minus sign. Round your percentage answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) PEREZ COMPANY Horizontal Analysis of Income Statements Percentage Change over Year 3 % Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income (loss) % Required A Required B Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. (Percentages may not add exactly due to rounding. Round your percentage answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) PEREZ COMPANY Vertical Analysis of Income Statements Percentage of Percentage of Sales Year 4 Sales Year 3 Sales % % Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income %