Exercise 13-3A (Algo) Horizontal and vertical analysis LO 13-1 Income statements for Franklin Company for Year 3 and Year 4 follow. FRANKLIN COMPANY Income Statements Sales Year 4 $201,000 Year 3 $181,000 Cost of goods sold 142,900 120,900 Selling expenses 20,900 18,900 Administrative expenses 12,100 14,100 Interest expense 3,900 5,900 Total expenses $179,800 $159,800 Income before taxes Income taxes expense Net income 21,200 5,600 $15,600 21,200 3,400 $17,800 Required a. Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. Complete this question by entering your answers in the tabs below. Required A Required B Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. (Negative answers should be indicated by a minus sign. Round your answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) FRANKLIN COMPANY Horizontal Analysis of Income Statements Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income (loss) Percentage Change over Year 3 % % < Required A Required B > Required A Required B Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. (Percentages may not add exactly due to rounding. Round your answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).) FRANKLIN COMPANY Vertical Analysis of Income Statements Sales Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income Percentage of Percentage of Sales Year 4 Sales Year 3 % % % % < Required A Required B >