Pixley Potter Limited has the following results for 20X5 and 20X6: A recent survey of similar businesses shows that between 20X5 and 20X6 revenue increased on average by 2.2% and gross profit by 5.0%.
Which one of the following statements is correct?
A horizontal analysis of Pixley Potter's revenue and gross profit figures for 20X6 and 20X7 shows:

Question

Pixley Potter Limited has the following results for 20X5 and 20X6:  A recent survey of similar businesses shows that between 20X5 and 20X6 revenue increased on average by 2.2% and gross profit by 5.0%.
Which one of the following statements is correct?
A horizontal analysis of Pixley Potter's revenue and gross profit figures for 20X6 and 20X7 shows:

Quizplus · Accepted Answer

The survey shows that between 20X5 and 20X6, revenue increased on average by 2.2% and gross profit by 5.0%. However, there is no information given about the average increase in revenue and gross profit between 20X6 and 20X7. Therefore, we can only compare Pixley Potter's own results for these two years. From the table, we can see that while revenue increased by 4%, gross profit increased by 8%. This means that Pixley Potter had a lower than average increase in revenue but a higher than average increase in gross profit. Therefore, choice C is correct.

Pixley Potter Limited Has the Following Results for 20X5 and 20X6