Question 1 The income statement for Richetti Ltd. is shown below RICHETTI LTD In

Question

Question 1 The income statement for Richetti Ltd. is shown below RICHETTI LTD Income Statement Year Ended December 31 (in millions) 2018 2017 2016 Sales Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income tax Income tax expense Net income $1,607 $1,414 $1,189 604 585 901 749 706 665 188 79 109 27 518 407 401 258 50 208 52 S82 $156 $108 184 40 144 36 Using horizontal analysis, calculate the horizontal percentage of a base-year amount, assuming 2016 is the base year. (Round answers to 1 decimal place, eg. 5.2% RICHETTI LTD Horizontal Analysis of Income Statement (% of base-year amount) Year Ended December 31 2018 2017 2016 Sales Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Income before income tax Income tax expense Net income

Explanation / Answer

Horizontal Analysis of Income Statement

% of Year- base amount

Note:

% of particular line item in a year = (Amount in respective year ÷ Base year amount) x 100

RICHETTE LTD.

Horizontal Analysis of Income Statement

% of Year- base amount

Year ended December 31 2018 2017 2016 -Base Year Sales 135.2% 118.9% 100% Cost of goods sold 149.2% 124% 100% Gross profit 120.7% 113.7% 100% Operating expenses 129.2% 101.5% 100% Income from operations 102.2% 140.2% 100% Interest expense 197.5% 125% 100% Income before income tax 75.7% 144.4% 100% Income tax expense 75% 144.4& 100% Net income 75.9% 144.4% 100%

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.