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    Comparative Income Statement - Erik Corporation

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    Here are the comparative income statements of Erik Corporation.

    Erik Corporation
    Comparative Income Statements
    For the years ended December 31

    2007 2008

    Net Sales $572,000 $520,000
    Cost of goods sold 477,000 450,000

    Gross Profit 95,000 70,000
    Operating Expenses 60,000 45,000

    Net Income 35,000 25,000

    (see attachment for better formatting of the tables)

    A) Prepare a horizontal analysis of the income statement data for Erik Corporation using 2006 as a base (show the amounts of increase or decrease).

    B) Prepare a vertical analysis of the income statement data for Erik Corporation for both years.

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    Solution Summary

    Excel spreadsheet shows how to carry out a horizontal and vertical analysis of an income statement.