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.

	percentage of sale year4	percentage of sales year3
sales
cost of goods sold
selling expenses
administrative expenses
interest expense
total expenses
income before taxes
income taxes expense
net income