Reference no: EM132679479

Problem - Horizontal Analysis of Income Statement

The following data were adapted from the financial statements of Kmart Corporation, prior to its filing for bankruptcy:

	In millions
For years ending January 31	2000	1999
Sales	$ 37,028	$ 35,925
Cost of sales (expense)	(29,658)	(28,111)
Selling, general, and administrative expenses	(7,415)	(6,514)
Operating income (loss)	$ (45)	$ 1,300

Required -

a. Prepare a horizontal analysis for the income statement showing the amount and percent of change in each of the following:

1. Sales

2. Cost of sales

3. Selling, general, and administrative expenses

4. Operating income

b. Comment on the results of your horizontal analysis in part (a).