Final answer:
The student aims to perform a horizontal analysis of income statements, comparing data over two years to spot changes and trends. However, the necessary financial figures for such an analysis are not provided in the text.
Step-by-step explanation:
The student is requesting assistance in performing a horizontal analysis of income statements, which involves comparing financial data over successive periods to identify trends and changes in both dollar amounts and percentages. This task requires the calculation of the difference in figures between the years and converting this difference into a percentage change. In this scenario, the student would compare data from two specific years (1991 and 1988) to determine how figures have changed over time. Identifying favorable and unfavorable trends would involve discerning whether certain financial metrics, such as revenues or profits, have increased (favorable) or decreased (unfavorable) from one year to the next. Unfortunately, the provided text does not contain specific income statement figures necessary for calculations, so we are unable to carry out the actual horizontal analysis.
A horizontal analysis is a technique used to compare financial data over a period of time, typically by looking at the changes in amounts and percentages. To identify favorable and unfavorable trends in the income statements provided, you would perform a horizontal analysis by calculating the changes in amounts and percentages for each line item. For example, if the net income increased by 10% from 2019 to 2020, this would be a favorable trend. However, if the cost of goods sold increased by 20% over the same period, this would be an unfavorable trend. By analyzing the changes in amounts and percentages for each line item, you can identify the favorable and unfavorable trends in the income statements