E13-3 (Algo) Preparing and Interpreting a Schedule for Horizontal and Vertical Analyses [LO 13-2, 13-3, 13-5]

According to the producer price index database maintained by the Bureau of Labor Statistics, the average cost of computer equipment fell 3.8 percent between January and December 2016. Required: 1. Conduct a horizontal analysis by calculating the year-over-year changes in each line item, expressed in dollars and in percentages for the income statement of Computer Tycoon Inc. for the year ended December 31, 2016.

Conduct a horizontal analysis by calculating the year-over-year changes in each line item, expressed in dollars and in percentages for the income statement of Computer Tycoon Inc. for the year ended December 31, 2016. (Decreases should be indicated by a minus sign. Round percentage values to 1 decimal place.)

COMPUTER TYCOON, INC.
Income Statements
For the Year Ended December 31
			Change in
	2016	2015	Dollars	Percentage
Sales Revenue	$102,000	$123,000			%
Cost of Goods Sold	61,000	72,300			%
Gross Profit	41,000	50,700			%
Selling, General, and Administrative Expenses	36,200	37,400			%
Interest Expense	520	485
Income before Income Tax Expense	4,280	12,815			%
Income Tax Expense	1,000	5,200			%
Net Income	$3,280	$7,615			%

• Req 2A
• Req 2B

Conduct a vertical analysis by expressing each line as a percentage of total revenues. (Round percentage values to 1 decimal place.)

COMPUTER TYCOON, INC.
Income Statements
For the Year Ended December 31
	2016			2015
Sales Revenue	$102,000	not attempted	%	$123,000	not attempted	%
Cost of Goods Sold	61,000	not attempted	%	72,300	not attempted	%
Gross Profit	41,000	not attempted	%	50,700	not attempted	%
Selling, General, and Administrative Expenses	36,200	not attempted	%	37,400	not attempted	%
Interest Expense	520	not attempted	%	485	not attempted	%
Income before Income Tax Expense	4,280	not attempted	%	12,815	not attempted	%
Income Tax Expense	1,000	not attempted	%	5,200	not attempted	%
Net Income	$3,280	not attempted	%	$7,615	not attempted	%

• Req 2A
• Req 2B

Conduct a vertical analysis by expressing each line as a percentage of total revenues. (Round percentage values to 1 decimal place.)

COMPUTER TYCOON, INC.
Income Statements
For the Year Ended December 31
	2016			2015
Sales Revenue	$102,000	not attempted	%	$123,000	not attempted	%
Cost of Goods Sold	61,000	not attempted	%	72,300	not attempted	%
Gross Profit	41,000	not attempted	%	50,700	not attempted	%
Selling, General, and Administrative Expenses	36,200	not attempted	%	37,400	not attempted	%
Interest Expense	520	not attempted	%	485	not attempted	%
Income before Income Tax Expense	4,280	not attempted	%	12,815	not attempted	%
Income Tax Expense	1,000	not attempted	%	5,200	not attempted	%
Net Income	$3,280	not attempted	%	$7,615	not attempted	%

• Req 2A
• Req 2B

Conduct a vertical analysis by expressing each line as a percentage of total revenues. (Round percentage values to 1 decimal place.)

COMPUTER TYCOON, INC.
Income Statements
For the Year Ended December 31
	2016			2015
Sales Revenue	$102,000	not attempted	%	$123,000	not attempted	%
Cost of Goods Sold	61,000	not attempted	%	72,300	not attempted	%
Gross Profit	41,000	not attempted	%	50,700	not attempted	%
Selling, General, and Administrative Expenses	36,200	not attempted	%	37,400	not attempted	%
Interest Expense	520	not attempted	%	485	not attempted	%
Income before Income Tax Expense	4,280	not attempted	%	12,815	not attempted	%
Income Tax Expense	1,000	not attempted	%	5,200	not attempted	%
Net Income	$3,280	not attempted	%	$7,615	not attempted	%