The following items were taken from the financial statements of Gannon Inc, over a three-year period: $$\begin{array} { l r r r }
& \underline { 2016 } & \underline { 2015 } & \underline { 2014 } \
\text { Net sales } & \$ 340,000 & \$ 330,000 & \$ 300,000 \
\text { Cost of goods sold } & 209,000 & 201,000 & 186,000 \
\text { Gross profit } & 131,000 & 129,000 & 114,000 \
\text { Net income } & 32,400 & 31,500 & 30,000
\end{array}$$ Required:
A) Using horizontal analysis and 2014 as the base year, calculate the trend percentages for the items provided.Explain whether the trends are favourable or unfavourable for each item.

Question

The following items were taken from the financial statements of Gannon Inc, over a three-year period: $$\begin{array} { l r r r } 
& \underline { 2016 } & \underline { 2015 } & \underline { 2014 } \
\text { Net sales } & \$ 340,000 & \$ 330,000 & \$ 300,000 \
\text { Cost of goods sold } & 209,000 & 201,000 & 186,000 \
\text { Gross profit } & 131,000 & 129,000 & 114,000 \
\text { Net income } & 32,400 & 31,500 & 30,000
\end{array}$$ Required:
A) Using horizontal analysis and 2014 as the base year, calculate the trend percentages for the items provided.Explain whether the trends are favourable or unfavourable for each item.

Quizplus · Accepted Answer

The Answer of The following items were taken from the financial statements of Gannon Inc, over a three-year period: $$\begin{array} { l r r r } 
& \underline { 2016 } & \underline { 2015 } & \underline { 2014 } \
\text { Net sales } & \$ 340,000 & \$ 330,000 & \$ 300,000 \
\text { Cost of goods sold } & 209,000 & 201,000 & 186,000 \
\text { Gross profit } & 131,000 & 129,000 & 114,000 \
\text { Net income } & 32,400 & 31,500 & 30,000
\end{array}$$ Required:
A) Using horizontal analysis and 2014 as the base year, calculate the trend percentages for the items provided.Explain whether the trends are favourable or unfavourable for each item.

The Following Items Were Taken from the Financial Statements of Gannon