Question

The income statements for Urban Outfits, Inc. are presented below: Urban Outfits, Inc. Income Statements Year Ended December 31 Current Year Prior Year Sales Revenue $ 806,559 $ 747,270 Cost of Goods Sold 403,589 373,505 Gross Profit 402,970 373,765 Operating and Other Expenses 141,050 129,500 Interest Expense 7,750 18,000 Income Tax Expense 48,200 46,700 Net Income $ 205,970 $ 179,565 Required: Prepare a horizontal analysis of the income statement above.

Answer 1

Answer and Explanation:

As per the data given in the question,

Prior year Current year Increase in $ increase in %

Sales $747,270 $806,559 $59,289 7.93%

COGS $373,505 $403.589 $30,084 8.05%

Gross Profit $373,765 $402,970 $29,205 7.81%

Operating and

other expenses$129,500 $141,050 $11,550 8.92%

Interest expense $18,000 $7,750 -$10,250 -56.94%

Income tax $46,700 $48,200 $1,500 3.21%

Net income $179,565 $205,970 $26,405 14.70%