Income statements for Stuart Company for Year 3 and Year 4 follow: STUART COMPANY Income Statements...

Transcribed Image Text:

Income statements for Stuart Company for Year 3 and Year 4 follow: STUART COMPANY Income Statements Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income Year 4 $201,900 143,400 20,600 12,100 3,600 Year 3 $181,900 121,400 18,600 14,100 5,600 $179,700 $159,700 22,200 22,200 3,900 6,800 $ 15,400 $ 18,300 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. Income statements for Stuart Company for Year 3 and Year 4 follow: STUART COMPANY Income Statements Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income Year 4 $201,900 143,400 20,600 12,100 3,600 Year 3 $181,900 121,400 18,600 14,100 5,600 $179,700 $159,700 22,200 22,200 3,900 6,800 $ 15,400 $ 18,300 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.

Answer rating: 100% (QA)

a To perform a horizontal analysis we can calculate the percentage change in each income statement c... View the full answer