Explore BrainMass

Explore BrainMass

    Vertical and Horizontal Analysis - Net Income

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    1. The vertical analysis (common-size) percentages for Vallejo Company's sales, cost of goods sold, and expenses are listed here.

    Vertical Analysis 2012 2011 2010
    Sales 100 % 100 % 100 %
    Cost of goods sold 62.7 64.2 66.1
    Expenses 24.4 26.8 28.3

    Did Vallejo's net income as a percent of sales increase, decrease, or remain unchanged over the 3-year period? Provide numerical support for your answer.

    2. Horizontal analysis (trend analysis) percentages for Spartan Company's sales, cost of goods sold, and expenses are listed here.

    Horizontal Analysis 2012 2011 2010
    Sales 96.2 % 104.8 % 100.0 %
    Cost of goods sold 101.0 98.0 100.0
    Expenses 105.6 95.4 100.0

    Explain whether Spartan's net income increased, decreased, or remained unchanged over the 3-year period.

    © BrainMass Inc. brainmass.com November 30, 2021, 6:52 am ad1c9bdddf

    Solution Summary

    The solution performs vertical as well as horizontal analysis to find out whether net income increased in the coming years when compared.