Answer in detail

The following items were taken from the financial statements of Abu Dhabi Company, over a four-year period Item 2012 2011 2010 2009 Net Sales $1,800,000 $1,300,000 $1,100,000 $1,000,000 Cost of Goods Sold 1.280.000 960,000 840.000 800.000 Gross Profit $520,000 $340,000 $260.000 $200,000 Instructions: Using horizontal analysis and 2009 as the base year to answer the following questions: 1. Compute the trend percentages for net sales, cost of goods sold, and gross profit. 2. Explain whether the trends are favorable or unfavorable for each item. Solution question 1: Item Net Sales - 2012 2011 2010 2009 Cost of Goods Sold Gross Profit