Asked by Jaden Jackson on Jun 04, 2024
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Using the following operating data for Complex Corporation illustrate horizontal analysis. 20172016 Net sales $350,000$300,000 Cost of goods sold 240,000160,000 Operating expenses 80,000120,000 Net income 30,00020,000\begin{array} { l r r r } & { 2017 } & { 2016 } \\\text { Net sales } & \$ 350,000 & \$ 300,000 \\\text { Cost of goods sold } & 240,000 & 160,000 \\\text { Operating expenses } & 80,000 & 120,000 \\\text { Net income } & 30,000 & 20,000\end{array} Net sales Cost of goods sold Operating expenses Net income 2017$350,000240,00080,00030,0002016$300,000160,000120,00020,000
Horizontal Analysis
A financial analysis technique that compares line items in financial statements over a series of periods to identify trends.
Net Sales
The total revenue from sales of goods or services, minus returns, allowances, and discounts.
Operating Expenses
Costs associated with running a business's core operations on a day-to-day basis, excluding the cost of goods sold.
- Gain an understanding of the critical nature and procedures used in comparative financial statement analysis, embracing horizontal, vertical, and trend evaluations.
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Learning Objectives
- Gain an understanding of the critical nature and procedures used in comparative financial statement analysis, embracing horizontal, vertical, and trend evaluations.
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