Part D. INCOME STATEMENT ANALYSIS (TREND-HORIZONTAL) Another useful technique is called horizontal analysis (or trend analysis). Basically you compare the same line item of an income statement and compute % changes across time. Again, there are various approaches. You can choose a base year and show all other years -Compute % change in net sales as (current sales prior year salesyprior year sales -Compute % change in net income as (current net income prior year net income)/prior year net income s a% of that base. Alternatively, you can compute the change from the prior year- and that is what you will do below for just two lines of the income statement. Round all of the computations too 3 decimal places. Show all If there is a decline in income, use a negative sign for your final answer. f these as a percentage.(i.e. if your answer .3475 round then format it as 34.8 (OWL has the % sign so do not add that). I have done a comparison of the prior year the year before that in the right hand column. GPS Current Year Prior Year 281/15797-1.8 % 15516-15797 Change in net sales % Change in net income 244/920 -26.5 % % AEO Current Year Prior Year 88017/3521848 2.5 % Change in net sales 2.6% 212449-218138 Change in net income Part D. INCOME STATEMENT ANALYSIS (TREND-HORIZONTAL) Another useful technique is called horizontal analysis (or trend analysis). Basically you compare the same line item of an income statement and compute % changes across time. Again, there are various approaches. You can choose a base year and show all other years -Compute % change in net sales as (current sales prior year salesyprior year sales -Compute % change in net income as (current net income prior year net income)/prior year net income s a% of that base. Alternatively, you can compute the change from the prior year- and that is what you will do below for just two lines of the income statement. Round all of the computations too 3 decimal places. Show all If there is a decline in income, use a negative sign for your final answer. f these as a percentage.(i.e. if your answer .3475 round then format it as 34.8 (OWL has the % sign so do not add that). I have done a comparison of the prior year the year before that in the right hand column. GPS Current Year Prior Year 281/15797-1.8 % 15516-15797 Change in net sales % Change in net income 244/920 -26.5 % % AEO Current Year Prior Year 88017/3521848 2.5 % Change in net sales 2.6% 212449-218138 Change in net income