Exercise 13-3A Horizontal and vertical analysis LO 13-1

Income statements for Campbell Company for Year 3 and Year 4 follow:

CAMPBELL COMPANY Income Statements
	Year 4				Year 3
Sales	$	200,600			$	180,600
Cost of goods sold		143,800				121,800
Selling expenses		20,700				18,700
Administrative expenses		12,600				14,600
Interest expense		3,400				5,400
Total expenses	$	180,500			$	160,500
Income before taxes		20,100				20,100
Income taxes expense		6,800				3,900
Net income	$	13,300			$	16,200

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.

sales	percentage(	%
cost of goods sold
selling expenses
administrative expenses
interest expense
total expenses
income before taxes
income taxes expense
net income (loss)