Question

McHale Company does business in two customer segments, Retail and Wholesale. The following annual revenue information was determined from the accounting system's invoice information:

20Y5 20Y4
Retail $126,000 $120,000
Wholesale 150,000 164,000
Total revenue $276,000 $284,000
Prepare a horizontal analysis of the segments. Round percentages to one decimal place.

Answer 1

Horizontal Analysis

For the years 20Y4 and 20Y5

20Y5 20Y4 Difference amount Difference Percent

Retail 126000 120000 6000 5.0%

Wholesale 150000 164000 -14000 -8.5%

Total revenue 276000 284000 -8000 -2.8%

Workings

Retail= 126000 - 120000 = 6000

6000/120000* 100 = 5.0%

Wholesale= 150000 - 164000 = -14000

-14000/164000 * 100 = 8.53%

Total revenue= 276000 - 284000 = -8000

-8000/284000 * 100 =2.82%