perform a horizontal analysis of the MCL income statement (table 4-7) for 2011 and 2012. wrote an explanation of this analysis.

40 Moderately Large Corporation Consolidaed Balance Sheet (in thousands except share data) Fiscal Year Ended T he Dec. 31, 2013 Dec. 31, 2012 ASSETS Current assets: Cash and cash equivalents $1,369 Accounts receivable, net $1,427 1,008 876 Inventories 1,489 481 Prepaid expenses and other current assets 157 126 Deferred income taxes, net 44 Total current assets 4,066 2,950 Property, plant and equipment, net 3,137 2,287 Other assets 168 161 TOTAL ASSETS $7,371 $5,398 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $429 $242 Accrued compensation and related costs dicht 104 98 Accrued taxes 132 141 Current portion of long-term debt 89 82 Total current liabilities 754 563 Long-term debt 2,630 151,830 Total liabilities 3,384 2,392 Shareholders' equity: Sad Common stock ($0.1 par value)-authorized, 350 350 4,000,000 shares; issued and outstanding, 3,500,000 Paid-in capital in excess of par 2,4152 ,415 Retained earnings 1,222 Total shareholders' equity 3,987 3,006 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $7,371 $5,398 241 3,574 3,303 Consolidated Statement of Earnings (in thousands, except earning per share) Fiscal Year Ended: 05000, Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2011 Net revenues DOO 000 Cash Sales $2,888 $2,751 809 $2,456 Credit Sales 6,046 5,258 000,- Total Net Revenues 4,572 8,935 8,009 7,028 Cost of Sales 00.000 5,361 4,405 3,725 Gross Profit 3,604 Salaries 1,258 1,183 Insurance 1,112 155 116 Depreciation 93 150 General and administrative expenses 135 Subtotal operating expenses 489 479 SD 2,052 Operating income 1,913 od 1.687 1,522 Interest expense 1,6911 .616 Don G ion - 10 11 Earnings before income taxes TO 11 Income taxes ob doy 1,512 Molto 1,680 do 529 Ich Net Earnings 1,605 -588 562 Per Common Share Share bago $ 983 $1,092 Net Earnings Basic 192 $1,043 o s 0.28 Net Earnings Diluted b edo $ 0.31 cod o $ 0.25 $ 0.30 Weighted average shares outstanding: Basic 3,500 4,000 Ost 122 361 Diluted $ 0.27 $ 0.26 olano 3,500 S 3,500 4,000 4,000