The following items were taken from the financial statements of Rug Inc. over a four-year period: $\begin{array}{lrrrr}
\text { Item }&2018&2017&2016&2015\
\text { Net Sales } & \$ 900,000 & \$ 650,000 & \$ 600,000 & \$ 500,000 \
\text { Cost of Goods Sold } &580,000&460,000&420,000&400,000 \
\text { Gross Profit } & \$ 320,000&\$190,000&\$180,000&\$100,000
\end{array}$ Instructions
Using horizontal analysis and 2015 as the base year compute the trend percentages for net sales cost of goods sold and gross profit. Explain whether the trends are favorable or unfavorable for each item.

Question

Quizplus · Accepted Answer

The Answer of The following items were taken from the financial statements of Rug Inc. over a four-year period: $\begin{array}{lrrrr}
\text { Item }&2018&2017&2016&2015\
\text { Net Sales } & \$ 900,000 & \$ 650,000 & \$ 600,000 & \$ 500,000 \
\text { Cost of Goods Sold } &580,000&460,000&420,000&400,000 \
\text { Gross Profit } & \$ 320,000&\$190,000&\$180,000&\$100,000
\end{array}$ Instructions
Using horizontal analysis and 2015 as the base year compute the trend percentages for net sales cost of goods sold and gross profit. Explain whether the trends are favorable or unfavorable for each item.

The Following Items Were Taken from the Financial Statements of Rug