Reference no: EM132916568

Problem 1: What would a horizontal analysis report show?

                                                       2020                   2019
Sales revenue                        603,000            500,000

Cost of sales                           454,000            401,000

Gross profit Selling expenses         149,000         99,000

Selling expenses                          55,000          54,000

PBIT                                        94,000           45,000

Income tax expense                   39,000            19,000

NPAT                                       55,000               26,000

A) a 21% decrease in sales revenue

B) a 112% increase In Profit

C) Improved selling expenses of 2%

D) both Profit before Income tax and Profit are 89.66% of Sales revenue

E) an effective tax rate of 41%