Textbook Problem

Horizontal analysis of income statement

For 20Y2, Macklin Inc. reported a significant increase in net income. At the end of the year, John Mayer, the president, is presented with the following condensed comparative income statement:

Instructions

1. 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. (Round percentages to one decimal place).
2. 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1).