Using 2008 as the base year prepare a horizontal analysis

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Reference no: EM13570332

Alpha Company Income Statements (in thousands)

Year ending December 31,	2010	2009	2008
Net Sales	$5,003,837	$4,934,430	$4,881,103
Cost of Goods Sold	2,755,323	2,804,459	2,784,392
Gross Profit	2,248,514	2,129,971	2,096,711
Selling, general, and
administrative exp	1,673,449	1,598,333	1,573,510
Operating Income	575,065	531,638	523,201
Interest Expense	61,168	71,971	80,837
Interest and net investment
expense (income)	(5,761)	(6,482)	(8,278)
Other expense-net	29,540	26,046	23,365
Income before income taxes	490,118	440,103	427,277
Income taxes	186,258	167,239	166,663
Net Income	$303,860	$272,864	$260,614

Requirements:

1. For each of the years shown, prepare a vertical analysis, using sales as the base. Write a paragraph explaining what the analysis shows.

2. Using 2008 as the base year, prepare a horizontal analysis for sales and cost of goods sold. What information does this analysis give you?

Reference no: EM13570332

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