When performing a horizontal analysis on an income statement, the percentage change inany individual item is calculated by dividing the dollar amount of the change from the baseperiod to the current period bya. the base period amount.b. the current period amount.c. the amount estimated for the future period.d. the average of the base and the current period amounts.

When performing a horizontal analysis on an income statement, the percentage change inany individual item is calculated by dividing the dollar amount of the change from the baseperiod to the current period bya. the base period amount.b. the current period amount.c. the amount estimated for the future period.d. the average of the base and the current period amounts.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 18DQ: What is the effect on the current period income statement and the balance sheet when inventories are...

See similar textbooks

Similar questions

What is the effect on the current period income statement and the balance sheet when inventories are written down using the lower of cost or market method? What is the effect on future period income statements and balance sheets?
Which of the following is a measurement of earnings that represents the profit before interest, taxes, depreciation and amortization are subtracted? A. net income B. retained earnings C. EBITDA D. EPS
In horizontal analysis, each item is expressed as a percentage of the a. latest year figure. b. net income figure. c. total assets. O d. earliest year figure.
When should an average amount be used for the numerator or denominator? When the denominator is a balance sheet item or items. When a ratio consists of an income statement item and a balance sheet item. When the numerator is a balance sheet item or items. When the numerator is an income statement item or items.
A. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. Round percentages to one decimal place. B. What conclusions can be drawn from the horizontal analysis? Round the answers to one decimal place.
a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place.
choose: When a balance sheet amount is related to an income statement amount in comparing a ratio a. The ratio losses its historical perspective because at the beginning of the year amount is combined with an end of the year amount. b. The income statement amount should be converted to an average for the year. c. Comparisons should be converted to market value d. The balance sheet amount should be converted to an average for the year.
Compute common-size percents for the following comparative income statements (round percents to one decimal). Using the common-size percents, which item is most responsible for the decline in net income?
Can you explain step by step how to calculate the net income for The period.
Vertical analysis reports the amount of each item in a statement as a percentage of a designated total. True or false?
When using vertical analysis, we express income statement accounts as a percentage of a. Net income. b. Sales. c. Gross profit. d. Total assets.
What is horizontal analysis, and how is a percentage change computed?