Calculating the year-over-year changes in each line item

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Problem - According to the producer price index database maintained by the Bureau of Labor Statistics, the average cost of computer equipment fell 8.1 percent between 2012 and 2013.

Required: Conduct a horizontal analysis by calculating the year-over-year changes in each line item, expressed in dollars and in percentages for the income statement of Computer Tycoon Inc. for the year ended December 31, 2013.

COMPUTER TYCOON, INC., Income Statements For the Year Ended December 31

 

2013

2012

Sales Revenue

$110,000

$135,000

Cost of Goods Sold

65,000

75,500

Gross Profit

45,000

59,500

Selling, General, and Administrative Expenses

37,000

39,000

Interest Expenses

600

525

Income before Income Tax Expense

7,400

19,975

Income Tax Expense

1,500

6,000

Net Income

$5,900

$13,975

Reference no: EM131891241

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