TRUE OR FALSE:

1) Days' sales in receivables measures the return on average receivables

2) Working capital measures a business's ability to meet its long-term obligations with its current assets.

3) For the vertical analysis of the balance sheet, the base amount is also the total of liabilities and stockholders' equity.

4) In a vertical analysis of the income statement, each line item is shown as a percentage of net income.

5) Horizontal analysis compares each item in the income statement to the net sales amount.

6) A quarterly report filed with the Securities and Exchange Commission is called a Form 10-K.

7) The following is summary of information presented on the financial statements of a company on December 31, 2017.

Account	2017	2016
Net Sales Revenue	$606,000	$504,000
Cost of Goods Sold	450,000	400,000
Gross Profit	$156,000	$104,000
Selling Expenses	52,000	56,000
Net Income Before Income Tax Expense	$104,000	$48,000
Income Tax Expense	37,000	23,000
Net Income	$67,000	$25,000

With respect to net income, a horizontal analysis reveals ________. (Round your answer to two decimal places.)

A) that net income is 168.00% of net sales revenue

B) a $25,000 increase in net income

C) a 168.00% decrease in net income

D) a 168.00% increase in net income