Question
You are investigating the impact of the recent inflation over your operational result with the Cost of Sales. You want to identify whether your operation's
You are investigating the impact of the recent inflation over your operational result with the Cost of Sales. You want to identify whether your operation's Cost of Sales percent (%) over revenues is actually growing or not.
Q. What type of analysis technique should be applied to answer this question?
A. The horizontal analysis of the Income Statements of the past few years; and see whether the amounts of the Cost of Sales of each year have grown.
B. The horizontal analysis of the Income Statements of the past few years; and verify the growth rate (%) changes of the Cost of Sales.
C. Both the vertical & the horizontal analysis of the Balance Sheets of the past few years; and verify the changes of the Inventory amounts along with the portion (%) changes of the Inventory over the Total Asset.
D. The vertical analysis of the Income Statements of the past few years; and see whether the percent (%) of the Cost of Sales has increased.
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