The comparative condensed income statements of Dubai Company are shown below. Dubai Company Comparative Condensed Income Statements For the Years Ended December 31 2021 2020 Net sales Cost of goods sold Gross profit Operating expenses Net income $620,000 450,000 170,000 54.000 $116,000 $500,000 400,000 100,000 40,000 $ 60,000 Required: 1. Prepare a horizontal analysis of the income statement data for Dubai Company using 2020 as a base. (Show the amounts of increase or decrease.) 2. Prepare a vertical analysis of the income statement data for Dubai Company in columnar form for both years. 3. Based on the analysis in number 1 and 2, discuss briefly the financial position of Dubai Company.

The comparative condensed income statements of Dubai Company are shown below. Dubai Company Comparative Condensed Income Statements For the Years Ended December 31 2021 2020 Net sales Cost of goods sold Gross profit Operating expenses Net income $620,000 450,000 170,000 54.000 $116,000 $500,000 400,000 100,000 40,000 $ 60,000 Required: 1. Prepare a horizontal analysis of the income statement data for Dubai Company using 2020 as a base. (Show the amounts of increase or decrease.) 2. Prepare a vertical analysis of the income statement data for Dubai Company in columnar form for both years. 3. Based on the analysis in number 1 and 2, discuss briefly the financial position of Dubai Company.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 1MAD

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