Reference no: EM132499003

The following items were taken from the financial statements of Dally Inc., over a three-year period:

Item                             Year 3             Year 2                Year 1

Net Sales                 P226,000         P212,000        P200,000

Cost of Goods Sold    150,000           140,000             136,000

Gross Profit                P76,000             P72,000             P64,000

Instructions:

Question 1: Using horizontal analysis and Year 1 as the base year, compute the trend percentages for net sales, cost of goods sold, and gross profit. Explain whether the trends are favorable or unfavorable for each item.