question 1

Conduct a horizontal analysis by calculating the year-over-year changes in each line item, expressed in dollars and in percentages (rounded to one decimal place).

Fill in the blanks:

			Increase (Decrease)
			2019 over 2018
	2019	2018	Amount	Percentage
Income Statement
Sales Revenue	$ 250,000	$ 205,000	$ 45,000	22.0%
Cost of Goods Sold	150,000	125,000	25,000	%
Gross Profit	100,000	80,000		25.0%
Operating Expenses	40,000	34,000	6,000	17.6%
Interest Expense	4,100	3,400		20.6%
Income before Income Tax Expense	55,900	42,600	13,300	%
Income Tax Expense (30%)	16,770	12,800	3,970	31.0%
Net Income	$ 39,130	$ 29,800	$	31.3%

question 2

Conduct a vertical analysis by expressing each line as a percentage of total revenues (round to one decimal place).

Fill in the blanks:

Income Statement
Sales Revenue	$ 222,000		%
Operating Expenses	39,600		%
Interest Expense	4,000		%
Income before Income Tax Expense	178,400		%
Income Tax Expense	35,680		%
Net Income	$ 124,880

Conduct a horizontal analysis by calculating the year-over-year changes in each line item, expressed in dollars and in percentages (rounded to one decimal place) Fill in the blanks: Increase (Decrease) 2019 over 2018 Amount 2019 2018 Percentage 250,000 $ 205.000 5 45,000 22.0% 150.000 125.000 25,000 Income Statement Sales Provence Cost of Goods Sold Gross Profit Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense (30%) Net Income 100.000 40.000 80.000 34,000 25.0% 17.8% 6,000 4.100 3.400 20.6% 55.900 16,770 42.600 12.800 13,300 3.970 31.0% 39 130 $ 29,800 31-3 Conduct a vertical analysis by expressing each line as a percentage of total revenues (round to one decimal place) Fill in the blanks: 222,000 39,600 % Income Statement Sales Revenue Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense Net Income 4,000 % 178,400 % 35,680 124,880