Question: Can someone please help with A, B, C & D below? PI4-3B A horizontal and vertical analysis of the income statement for a retail company

 Can someone please help with A, B, C & D below?

Can someone please help with A, B, C & D below?

PI4-3B A horizontal and vertical analysis of the income statement for a retail company selling a wide variety of general merchandise is shown below: RETAIL CORPORATION Horizontal Income Statement Year Ended Revenue Cost of goods sold Gross profit Operating expenses Profit from operations Interest expense Other revenue Profit before income tax Income tax expense Profit 2015 I 40.0% 148.3% 127.5% 171.4% 93.3% 40.0% 2014 1 1 1.0% I 13.3% 107.5% 2013 114.0% I 16.7% I 10.0% 126.9% 96.9% 80.0% 200.0% 11 3.8% 124.0% 111.4% 2012 1 00.0% 00.0% 1 00.0% 100.0% 100.0% 1 00.0% 1 00.0% 1 00.0% 1 00.0% 100.0% 87.6% 60.0% I 40.0% 110.8% 140.0% 160.0% I 35.2% 109.5% RETAIL CORPORATION Vertical Income Statement Year Ended 2015 1 00.0% 63.6% 36.4% 21.4% 15.0% (29%) 0.9% 13.0% 2.9% 2014 100.0% 61.2% 38.8% 21 .0% 17.8% (5.4%) 0.6% I 3.096 2013 1 00.0% 61.4% 38.6% 19.5% 19.1% (7.0%) 0.9% 13.0% 2.7% 10.3% 2012 100.0% 60.0% 40,0% 17.5% Revenue Cost of goods sold Gross profit Operating expenses Profit from operations Interest expense Other revenue Profit before income tax Income tax expense Profit (10.0%) 13.0% 2.5% 10.4% 10,5% Instructions (a) (b) In a vertical analysis, the company's profit before income tax has remained unchanged at 13% of revenue over the four- How effectively has the company controlled its cost of goods sold over the four-year period? year period. Yet, in a horizontal analysis, profit 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

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!