Using horizontal analysis and 2013 as the base year, compute the trend percentages for net sales, cost of goods sold, and gross profit. Explain whether the trends are favorable or unfavorable for each item.

Using horizontal analysis and 2013 as the base year, compute the trend percentages for net sales, cost of goods sold, and gross profit. Explain whether the trends are favorable or unfavorable for each item.

The following items were taken from the financial
statements of Rug, Inc., over a four-year period:

Item 2016 2015
2014
2013

Net Sales $900,000 $650,000 $600,000 $500,000

Cost of Goods Sold
580,000
460,000 420,000 400,000

Gross Profit $320,000 $190,000 $180,000 $100,000

Instructions

Using horizontal analysis and 2013 as the base year,
compute the trend percentages for net sales, cost of goods sold, and gross
profit. Explain whether the trends are favorable or unfavorable for each item.


Price: £ 45

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