The following items were taken from the financial statements of Kramer Manufacturing, Inc., over a 3-year period: Item 2021 2020 2019 Net sales $226,000 $212,000 $200,000 Cost of goods sold 150,000 140,000 125,000 Gross profit $ 76,000 $ 72,000 $ 75,000 Instructions Using horizontal analysis and 2019 as the base year, compute the trend percentages for net sales, cost of goods sold, and gross profit. Item 2021 2020 2019 Net sales % % 100% Cost of goods sold % % 100% Gross profit % % 100% Explain whether the trends are favorable or unfavorable for each item.
- The following items were taken from the financial statements of Kramer Manufacturing, Inc., over a 3-year period:
Item 2021 2020 2019
Net sales $226,000 $212,000 $200,000
Cost of goods sold 150,000 140,000 125,000
Gross profit $ 76,000 $ 72,000 $ 75,000
Instructions
Using horizontal analysis and 2019 as the base year, compute the trend percentages for net sales, cost of goods sold, and gross profit.
Item 2021 2020 2019
Net sales % % 100%
Cost of goods sold % % 100%
Gross profit % % 100%
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Explain whether the trends are favorable or unfavorable for each item. |
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