The comparative condensed income statements of Emley Corporation are shown below
ID: 2504419 • Letter: T
Question
The comparative condensed income statements of Emley Corporation are shown below.EMLEY CORPORATION
Comparative Condensed Income Statements
For the Years Ended December 31 2015 2014 Net sales $660,000 $600,000 Cost of goods sold 483,000 420,000 Gross profit 177,000 180,000 Operating expenses 125,000 120,000 Net income $ 52,000 $ 60,000 The comparative condensed income statements of Emley Corporation are shown below.
EMLEY CORPORATION
Comparative Condensed Income Statements
For the Years Ended December 31 2015 2014 Net sales $660,000 $600,000 Cost of goods sold 483,000 420,000 Gross profit 177,000 180,000 Operating expenses 125,000 120,000 Net income $ 52,000 $ 60,000 EMLEY CORPORATION
Comparative Condensed Income Statements
For the Years Ended December 31 2015 2014 EMLEY CORPORATION
Condensed Income Statements
For the Years Ended December 31 Increase or (Decrease)
During 2015 2015 2014 Amount Percentage Net sales $660,000 $600,000 Cost of goods sold 483,000 420,000 Gross profit 177,000 180,000 Operating expenses 125,000 120,000 Net income $52,000 $60,000 LINK TO TEXT LINK TO TEXT LINK TO TEXT EMLEY CORPORATION
Condensed Income Statements
For the Years Ended December 31 2015 2014 Amount Percent Amount Percent Net sales $660,000 $600,000 Cost of goods sold 483,000 420,000 Gross profit 177,000 180,000 Operating expenses 125,000 120,000 Net income $ 52,000 $ 60,000 The comparative condensed income statements of Emley Corporation are shown below.
EMLEY CORPORATION
Comparative Condensed Income Statements
For the Years Ended December 31 2015 2014 Net sales $660,000 $600,000 Cost of goods sold 483,000 420,000 Gross profit 177,000 180,000 Operating expenses 125,000 120,000 Net income $ 52,000 $ 60,000 The comparative condensed income statements of Emley Corporation are shown below. EMLEY CORPORATION Comparative Condensed Income Statements For the Years Ended December 31 Prepare a horizontal analysis of the income statement data for Emley Corporation using 2014 as a base. (Round percentages to 1 decimal place, e.g. 12.3%.) Prepare a vertical analysis of the income statement data for Emley Corporation in columnar form for both years. (Round percentages to 1 decimal place, e.g. 12.3%.)
Explanation / Answer
Horizontal analysis
Net sales
Increase in amount - 660000-600000
=60000
% increase =[60000/600000]*100
= 10%
Cogs
Increasebin amount = 63000
% increase = 15%
Gross profit
Decrease in amount = (3000)
% decrease = (1.7%)
Operating expenses
Increase in amount = 5000
% increase = 4.2%
Net profit
Decrease in amount = (8000)
% decrease = (13.3%)
VERTICAL ANALYSIS
NET SALES
2015 = (660000/660000)*100
=100%
2014 = (600000/600000)*100
=100%
COGS
2015 = (483000/660000)*100
=73.2%
2014 = (420000/600000)*100
=70%
GROSS PROFIT
2015=26.8%
2014=30%
OPERATING EXPENSES
2015= 18.9%
2014=20%
NET INCOME
2015=7.9%
2014=10%
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