1. Examine revenue and related accounts. Revenue is the largest item on the income statement, so we need to assess it on a quantitative and qualitative basis.

a. Explain what horizontal analysis is and why it is useful in the analysis process. Compare the horizontal analyses for the income statements of the two companies that I have prepared in the Excel Horizontal Analysis attachment. Analyze each company over the last two years to identify two account changes that should be investigated for each company. Do not reference a computed figure on the income statement like Gross Margin, but a specific account. Why did you pick these items?

b. Read the managements discussion and analysis (MD&A) section of the 10-Ks, which is found in Item 7 of the table of contents. Explain how the companies senior managers explain sales and net earnings (income) in the most recent fiscal year. Provide the page number(s) you are using from the 10-K as your reference to this question.

c. Find the footnote or notes to the financial statements on the operations of the business and/or what their segment(s) are. Provide a short summary of what the company considers their business and segments. Also, provide the page number you found this information at. Remember that the notes to the financial statements are an integral part of the financial statements, so are part of Item 8 and follow the audited financial statements. Provide the page number you found this information at.

d. Find the footnote or notes to the financial statements on sales revenue recognition and gift card revenue recognition policy if applicable. Provide how the company recognizes revenue. Also, compare the revenue recognition to each other.

Bed Bath & Beyond Inc. (Ticker. BBBY) for year ended Feb. 25, 2017 Direct ink to 10- Amounts Thousands) Horizontal AralyGIG Bed B and Beyond, Ino. Inoome Feb. 27 Feh. 25, 2017 Amount Peroentage 2,215,7S7 12,103.887 111,870 ,639,407 7,483.577 $15.830 0.92% Gross pront 43,90) -0.9 % Seling, qeneral and admnistratve expenses 3,205407 Operatng proft nterest epense Earnings before provision for income tanes Provis on for Net eamings 19.77% .47% 19.72% 69,555 261,790) 80,547 Pier 1 Imports Inc. (Ticker: PIR) for year ended Feb. 25, 2017 Direct link to 10-K ives edgaridata/278130000119312517136345/d343458d10k 1 Importa, Inc. Incomw Statamt 25, 2017 ,892 230 ,B4) Cost af Grass prot Salina, genal and adminstraiva expss ,131,138 ,18T 250 TBA28 0 944 T 872) $9,015 Ope atieg incama (20.348) -22.05% 24T0 2,073 237) 2 280 2043 2233) NM (207) (17906) -28.35% Income ta pravian 23531 Bed Bath & Beyond Inc. (Ticker. BBBY) for year ended Feb. 25, 2017 Direct ink to 10- Amounts Thousands) Horizontal AralyGIG Bed B and Beyond, Ino. Inoome Feb. 27 Feh. 25, 2017 Amount Peroentage 2,215,7S7 12,103.887 111,870 ,639,407 7,483.577 $15.830 0.92% Gross pront 43,90) -0.9 % Seling, qeneral and admnistratve expenses 3,205407 Operatng proft nterest epense Earnings before provision for income tanes Provis on for Net eamings 19.77% .47% 19.72% 69,555 261,790) 80,547 Pier 1 Imports Inc. (Ticker: PIR) for year ended Feb. 25, 2017 Direct link to 10-K ives edgaridata/278130000119312517136345/d343458d10k 1 Importa, Inc. Incomw Statamt 25, 2017 ,892 230 ,B4) Cost af Grass prot Salina, genal and adminstraiva expss ,131,138 ,18T 250 TBA28 0 944 T 872) $9,015 Ope atieg incama (20.348) -22.05% 24T0 2,073 237) 2 280 2043 2233) NM (207) (17906) -28.35% Income ta pravian 23531