Question

This Question: 2 pts 8 Which of the following best describes horizontal analysis? A. comparing financial statement line items from year to year for the same company O B. comparing a company's financial statements with other companies C. expressing each financial statement amount as a percentage of a budgeted amount OD. calculating key ratios to evaluate performance

Answer 1

1)Which of the following best describe horizontal analysis

Answer : A) compairing financial statement line iteam from year to year for the same company

Explanation : Horizontal analysis is a financial statement analysis technique that shows changes in the amounts of corresponding financial statement items over a period of time. The statements for two or more periods are used in horizontal analysis.

2) B) 39.9%

Gross profit = Net sales revenue - cost of goods sold

= 599000-36000 = 239000

Gross profit as percentage of net sales = Gross Profit/Net sales = 239000/599000 = 39.90%

3) D) $ 60500

Working Capital = Current Assset - Current Liability

= Cash + Short term Investment+ Net accounts receivable+Merchandise Inventory -Current Liability

= $44500+$29000+$98000+$161000-$272000

= $60500