Fancy Footwear is a premier designer and manufacturer of designer shoes for women. Over the past two years, they have concerted a lot of effort into both their Boots and Heels divisions. The results of these efforts are shown here: Management is interested in analyzing this data. What is the percent change in Net Income for both the Boots and Heels divisions from Year 1 to year 2? (Use parentheses around a number to indicate a negative value or loss.)

Question

Fancy Footwear is a premier designer and manufacturer of designer shoes for women. Over the past two years, they have concerted a lot of effort into both their Boots and Heels divisions. The results of these efforts are shown here:  Management is interested in analyzing this data. What is the percent change in Net Income for both the Boots and Heels divisions from Year 1 to year 2? (Use parentheses around a number to indicate a negative value or loss.)

Quizplus · Accepted Answer

This question requires familiarity with manipulating data in Excel. To calculate the change in net income, you must first calculate the Net Incomes for Years 1 and 2. Create new rows for Boots and Heels, and in the column to the right of that, calculate the net income on Boots for Year 1. Use the following formula: "Year 1 Sales - Year 1 Cost of Goods Sold (COGS) - Year 1 Expenses", or =B2-B6-B10 that should return an answer of $17,307. Now, do the same for Year 2 in a new cell using the following formula: "Year 2 Sales - Year 2 COGS - Year 2 Expenses", or C2-C6-C10 that should return a value of $25,221. To calculate the percent change in net income for Boots, use the following formula: (Year 2 Net Income - Year 1 Net Income)/(Year 1 Net Income) that should give a result of 45.73%. Repeat this process for Heels, and the answer should be 39.12% (Choice D).

Fancy Footwear Is a Premier Designer and Manufacturer of Designer