Part (a) (4 marks)

Cat and Dog Pet Supplies Pty Ltd sell pet supplies targeted at the personal household market selling products for domestic cats and dogs including a range of specialty food.

Required:

1. Complete a horizontal analysis for the business below.

2. Based on your findings make a recommendation and justification, include 2 points from the data, as to how the business has performed from 2019-2020 with consideration to the implications of covid.

All answers must be rounded to no decimal places.

Horizontal Analysis
Cat and Dog Pet Supplies Pty Ltd	2020	2019	$ Movement	% Movement
Sales	205,000	160,000
Cost of Sales	125,000	103,500
Gross Profit	80,000	56,500
Total Operating Expenses	26,000	20,000
EBIT	54,000	36,500
Interest Expense	5,500	2,500
Profit before income tax	48,500	34,000
Income tax expense	12,600	10,200
Profit	35,900	23,800

*Students please ensure you have answered all of this question.