The income statements for Urban Outfits, Inc. are presented below Prepare a hori

Question

The income statements for Urban Outfits, Inc. are presented below

Prepare a horizontal analysis of the income statement above. (Round your answers to the nearest whole percent.)

Urban Outfits, Inc.
Income Statements
Year Ended December 31 Current Year Prior Year   Sales revenue $ 715,985 $ 770,059   Cost of goods sold 350,448 380,254   Gross profit 365,537 389,805   Operating and other expenses 121,584 131,555   Interest expense 13,100 7,100   Income tax expense 41,500 42,600      Net income $ 189,353 $ 208,550   

Prepare a horizontal analysis of the income statement above. (Round your answers to the nearest whole percent.)

URBAN OUTFITS, INC Income Statements Year Ended December 31 Increase (Decrease) Current Year Prior Year Amount Percent (%) Sales Revenue $715,985 $770,059 Cost of Goods Sold 350,448 380,254 Gross Profit 365,537 389,805 Operating and Other Expenses 121,584 131,555 Interest Expense 13,100 7,100 Income Tax Expense 41,500 42,600 Net Income 189,353 208,550

Explanation / Answer

URBAN OUTFITS, INC Income Statements Year Ended December 31 Increase (Decrease) Current Year Prior Year Amount Percent (%) Sales Revenue $715,985 $770,059 715,985-770,059 = -54,074 (-54,074/770,059)*100 = -7% Cost of Goods Sold 3,50,448 3,80,254 350,448-380,254 = -29,806 (-29,806/380,254)*100 = -8% Gross Profit 3,65,537 3,89,805 365,537-389,805 = -24,268 (-24,268/389,805)*100 = -6% Operating and Other Expenses 1,21,584 1,31,555 121,584-131,555 = -9,971 (-9,971/131,555)*100 = -7% Interest Expense 13,100 7,100 13,100-7,100 = 6,000 (6,000/7,100)*100 = 85% Income Tax Expense 41,500 42,600 41,500-42,600 = -1,100 (-1,100/42,600)*100 = -3% Net Income 1,89,353 2,08,550 189,353-208,550 = -19,197 (-19,197/208,550)*100 = -9%

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