The income statements for Federer Sports Apparel for 2019 an

The income statements for Federer Sports Apparel for 2019 and 2018 are presented below. Required Prepare a horizontal analysis for 2019 using 2018 as the base year. (Decreases should be indicated with a minus sign. Round your percentage answers to 1 decimal place.) 2018 18,800,000 15,500,000 3,300,000 2019 Amount % Net sales Cost of goods old O 9013.200000 7.00,00 6200,000 88.8 7, Gross pro 5,600,000 8,500,000 (2,900,000)/ (34.1) Operating expenses Depreciation expense Inventory write-200,000 down Loss (litigation) 1,500,000 300,000 1,200,0004.0 1,600,000| 1,200,000) 400,000 33.3 0.0 0 200,000100.0 ospensesion 100,00 1,000000 Income before tax Income tax expense 1,300,000 6,000,000 (4,700,000)(78.3) 450,000 2,000,000 Net income 850,000 4,000,000

Solution

Horizontal analysis :

	2019	2018	Amount	%
Net Sales	18800000	15500000	3300000	21.3%
Cost of goods sold	13200000	7000000	6200000	88.6%
Gross profit	5600000	8500000	-2900000	-34.1%
Operating expense	1600000	1200000	400000	33.3%
Depreciation expense	1000000	1000000	0	0%
Inventory write down	200000	0	200000	100%
Loss (litigation)	1500000	300000	1200000	4%
Income before tax	1300000	6000000	-4700000	-78.3%
Income tax expense	450000	2000000	-1550000	-77.5%
Net income	850000	4000000	-3150000	-78.8%