Question

The following is a summary of information presented on the financial statements of a company on December​ 31, 2019. Account 2019 2018 Net Sales Revenue Cost of Goods Sold Gross Profit Selling Expenses Net Income Before Income Tax Expense Income Tax Expense Net Income With respect to net​ income, a horizontal analysis reveals​ ________. (Round your answer to two decimal​ places.)

Answer 1

Increase in net income of 145.45%

Step-by-step explanation:

Calculation for what the horizontal analysis reveals with respect to net income

Since we have $54,000 in 2019 and $22,000 in 2018 this means that we are going to calculate for what the Horizontal analysis reveal using this formula

Horizontal analysis = Net income 2019 -Net income 2018/Net income 2018

Let plug in the formula

Horizontal analysis=$54,000-$22,000/$22,000

Horizontal analysis =$32,000/$22,000

Horizontal analysis =1.4545×100

Horizontal analysis =145.45% Increase

Therefore what the horizontal analysis reveals with respect to net income will be an Increase in net income of 145.45%