M131 Calculations for Horizontal Analyses LO 132 Using the f

M13-1 Calculations for Horizontal Analyses [LO 13-2] Using the following income statements, perform the calculations needed for horizontal analyses (Decreases should be indicated by a minus sign. Round percentage values to 1 decimal place.) LOCKEY FENCING CORPORATION Income Statements For the Years Ended December 31 Change in Current Previous Dollars Percentage Net Sales Cost of Goods Sold Gross Profit Selling, General, and Administrative Expenses Income from Operations Interest Expense Income before Income Tax Income Tax Expense Net Income $116,000 $ 83,000 49,000 34,000 2,900 31,100 5,350 25,750 7,725 $ 28,280$ 18,025 66,000 50,000 5,800 44,200 3,800 40,400 12,120 0

Solution

Horizontal analysis :

	Current	Previous	Dollar	Percentage
Net Sales	116000	83000	33000	39.8%
Cost of goods sold	66000	49000	17000	34.7%
Gross profit	50000	34000	16000	47.1%
Selling, general and administrative expense	5800	2900	2900	100%
Income from operation	44200	31100	13100	42.1%
Interest expense	3800	5350	-1550	-29.0%
Income before income tax	40400	25750	14650	56.9%
Income tax expense	12120	7725	4395	56.9%
Net income	28280	18025	10255	56.9%