Question

* Return to course ÈBusiness Course Question 7 Not yet answered Marked out of 5.00 P Flag question 2020 Performing a Vertical and Horizontal Analysis Complete a vertical analysis of the following income statement from Gomez Corporation . Do not use a negative sign in your answers. • Round to the nearest whole percentage point (for example, enter 60 for 60.4% or 61 for 60.5%). Vertical Analysis 2020 2019 Income Statement 2019 % of Sales % of Sales Revenues $39,000 $42.900 96 % Cost of goods sold 25,920 29,160 96 Gross margin 13.080 13,740 % Operating expenses 8,800 10.000 %6 Net income $4,280 $ 3.740 96 Complete a horizontal analysis of the following income statement from Gomez Corporation • Use a negative sign to indicate a decrease. • Round to the nearest whole percentage point (for example, enter 60 for 60.4% or 61 for 60.5%). *** 96 Percentage Change Horizontal Analysis Dollar Income Statement 2020 2019 Change Revenues $39,000 $42,900 $1 Cost of goods sold 25,920 29,160 S Gross margin 13,080 13,740 $ Operating expenses 8.800 10,000 $ Net income $ 4.280 $3,740 5 96 96 96 Question 8 Not yet answered Marked out of 5.00 P Flag question Indirect Method - Preparing the Operating Activities Section
please show work

Answer 1

Vertifical Analysis

			2020	2019
Income Statement	2020	2019	% of Sales	% of Sales
Revenues	$            39,000	$            42,900	100.0%	100.0%
Cost of Goods Sold	$            25,920	$            29,160	66.5%	68.0%
Gross Margin	$            13,080	$            13,740	33.5%	32.0%
Operating Expenses	$               8,800	$            10,000	22.6%	23.3%
Net Income	$              4,280	$              3,740	11.0%	8.7%

Calculations

2020	2019
% of Sales	% of Sales
=39000/39000	=42900/42900
=25920/39000	=29160/42900
=13080/39000	=13740/42900
=8800/39000	=10000/42900
=4280/39000	=3740/42900

Horizontal Analysis

			Dollar	Percentage
Income Statement	2020	2019	Change	Change
Revenues	$            39,000	$            42,900	$             (3,900)	-9.1%
Cost of Goods Sold	$            25,920	$            29,160	$             (3,240)	-11.1%
Gross Margin	$            13,080	$            13,740	$                (660)	-4.8%
Operating Expenses	$               8,800	$            10,000	$             (1,200)	-12.0%
Net Income	$              4,280	$              3,740	$                  540	14.4%

Calculations

Dollar	Percentage
Change	Change
=39000-42900	=-3900/42900
=25920-29160	=-3240/29160
=13080-13740	=-660/13740
=8800-10000	=-1200/10000
=4280-3740	=540/3740

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