Exercise 14-4 The comparative condensed income statements of Hendi Corporation a

Question

Exercise 14-4 The comparative condensed income statements of Hendi Corporation are shown below HENDI CORPORATION Comparative Condensed Income Statements For the Years Ended December 31 2014 2013 Net sales Cost of goods sold Gross profit Operating expenses Net income $597,480 468,360 129,120 59,780 $ 69,340 $495,650 401,380 94,270 56,320 $ 37,950 (a) Prepare a horizontal analysis of the income statement data for Hendi Corporation using 2013 as a base. (Show the amounts of increase or decrease.) (if amount and percentage are a decrease show the numbers as negative, e.g.-55,000,-20% or (55,000). (2096). Round percentages to 1 decimal place, e.g. 12.396.) HENDI CORPORATION Condensed Income Statements For the Years Ended December 31 Increase or (Decrease) During 2013 2014 2013 Amount Percentage Net sales $597,480 $495,650

Explanation / Answer

Horizontal analysis :

Vertical analysis :

Increase (decrease) during 2013 2014 2013 Amount Percent Net Sales 597480 495650 101830 20.5% Cost of goods sold 468360 401380 66980 16.7% 1Gross profit 129120 94270 34850 37.0% Operating expense 59780 56320 3460 6.1% Net income 69340 37950 31390 82.7%

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