Complete the horizontal analysis given data for the XYZ Company XYZ Company Inco
ID: 2417370 • Letter: C
Question
Complete the horizontal analysis given data for the XYZ Company
XYZ Company Income Statement For the year ended 12/31/15 12/31/14 Horizontal Analysis Net sales $435,760 $335,200 Cost of goods sold 135,465 105,230 Gross profit 300,295 229,970 Research & development 50,000 55,000 Selling expenses 49,400 38,000 Administrative expenses 156,900 142,100 Depreciation expense 74,000 36,000 Patent amortization expense 4,000 333 Income (loss) from operations -34,005 -41,463 Other revenue (expense), net -25,400 427 Net income (loss) ($59,405) ($41,036) * Comprised mostly of Interest Expense for 2015 Comment on the significance of the trend results:Explanation / Answer
XYZ Company Income Statement For the year ended 12/31/15 12/31/14 Horizontal Analysis Increase/decrease $ Increase/decrease Percentage Net sales $435,760 $335,200 $100,560 30.00% Cost of goods sold 135,465 105,230 $30,235 28.73% Gross profit 300,295 229,970 $70,325 30.58% Research & development 50,000 55,000 ($5,000) -9.09% Selling expenses 49,400 38,000 $11,400 30.00% Administrative expenses 156,900 142,100 $14,800 10.42% Depreciation expense 74,000 36,000 $38,000 105.56% Patent amortization expense 4,000 333 $3,667 1101.20% Income (loss) from operations -34,005 -41,463 $7,458 -17.99% Other revenue (expense), net -25,400 427 ($25,827) -6048.48% Net income (loss) ($59,405) ($41,036) ($18,369) 44.76% In the Comparitive Income Statement, the sales has been increase by 30% whereas cost of goods sold has been increased by 28.73% resulting in increase in Gross profit by 30.58%. The depreciation expenses and patent expenses has been incerased by 105.56 % and 1101.20% resulting to Net loss incerased by 44.76%. This may conclude that company has purchased the new patents rights and fixed assets to incerase the production and in the coming years the company profitability may increase in the near future. the comany is in the expand mkode and company is incraesing its production capacity and may have better future.