The comparative financial statements of Seward, Inc. include the following data:

	Current Year			Prior Year
Income Statement
Net Sales Revenue	$	146,000		$	116,000
Cost of Goods Sold		63,000			55,000
Operating Expenses		40,600			33,600
Interest Expense		5,100			5,100
Income Tax Expense		6,600			5,600
Net Income		30,700			16,700
Balance Sheet
Current Assets		131,000			111,000
Plant, Property and Equipment, Net		114,000			121,000
Current Liabilities		53,000			46,000
Long-Term Liabilities		51,000			51,000
Shareholders Equity		141,000			135,000
Total Liabilities & Shareholders Equity		245,000			232,000

Which of the following would be shown on Seward's horizontal analysis when calculating percentage changes from the prior year to the current year?

Multiple Choice

• An increase in net income of 32.7%.

• An increase in sales revenue of 31.6%.

• An increase in gross profit of 36.1%.

• An increase in interest expense of 32.2%.

A P/E ratio is calculated in the middle of the accounting year. For a given share price, the company could use the most recent annual EPS, or it could use the total of the most recent four quarterly EPS numbers. Which of the following statements is not true?

Multiple Choice

• The ratio will be larger if the most recent annual EPS is used when earnings are decreasing.

• The ratio will be smaller if the EPS for the last four quarters are used when earnings are increasing.

• The ratio will be smaller if the most recent annual EPS is used when earnings are decreasing.

• The ratio will be larger if the EPS for the last four quarters are used when earnings are decreasing