Provost Corporation Comparative Statement of Financial Position December 31, 2021 and 2020 $(000 omitted)
	Assets	2021	2020
	Current assets:
	Cash	$4,000	$3,600
	Short-term marketable securities	2,000	1,200
	Accounts receivable (net)	20,000	16,800
	Inventory	28,000	28,800
	Total current assets	54,000	50,400
	Long-term assets:
	Property, plant, and equipment (net)	75,000	81,600
	Long-term investments	12,000	12,000
	Total assets	$141,000	$144,000
	Liabilities and Stockholders' Equity
	Current liabilities:
	Accounts payable	$7,000	$6,000
	Wages payable	1,000	1,200
	Total current liabilities	8,000	7,200
	Long-term liabilities:
	Bonds payable, 10%	24,000	24,000
	Total liabilities	32,000	31,200
	Stockholders' equity:
	Preferred stock, 10%, 1,000,000 shares	20,000	20,000
	Common stock, 5,000,000 shares, no par5,000,000	30,000	30,000
	Retained earnings	59,000	62,800
	Total stockholders' equity	109,000	112,800
	Total liabilities and stockholders' equity	$141,000	$144,000

	Provost Corporation Comparative Statement of Income For the Years Ended December 31, 2021 and 2020 $(000 omitted)
		2021	2020
	Sales (all on credit)	$280,000	$280,000
	Cost of goods sold	200,000	168,000
	Gross margin	80,000	112,000
	Operating expenses	40,000	38,000
	Net operating income	40,000	74,000
	Interest expense	5,000	4,000
	Net income before income tax	35,000	70,000
	Income tax expense	14,000	28,000
	Net income	$21,000	$42,000

REQUIRED:

1.Use the balance sheet and income statement given above to analyze the company using horizontal analysis. 2.Use the balance sheet and income statement given above to analyze the company using vertical analysis.

3.Using Horizontal Analysis, research on the possible reasons why there is an increase or decrease on the following: a.Total Assets b.Total Liabilities c.Gross Profit d.Net Profit