Question 3 The following is a summary of information presented on the financial statements of The Cake Company on December 31, 2007. Account Current assets Accounts receivable Merchandise inventory Current liabilities Long-term liabilities Common stock (2007: 5,000 shares; 2006: 4,000 shares) Retained earnings 2007 $65,000 80,000 50,000 75,000 30,000 50,000 2006 $50,000 75,000 40,000 50,000 50,000 40,000 40,000 25,000 Net sales revenue Cost of goods sold Gross profit Selling and general expenses Net income before income tax expense Income tax expense Net income $525,000 400,000 125,000 45,000 80,000 24,000 $56,000 $500,000 395,000 105,000 50,000 55,000 16,500 $38,500 What would horizontal analysis report with respect to net sales revenue? Horizontal analysis would report a 5% increase in net sales revenue. Horizontal analysis would report a dividend yield of $8.20. Horizontal analysis would report cost of goods sold as 79.19% of net sales revenue. Horizontal analysis would report accounts receivable turnover as 7.24 times