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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
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Horizontal analysis of income statement

The following data (in millions) are taken from the financial statements of Target Corporation:

Chapter 2, Problem 2.23EX, Horizontal analysis of income statement The following data (in millions) are taken from the

a. For Target Corporation, determine the amount of change in millions and the percent of change (round to one decimal place) from the prior year to the recent year for:

1. Revenue

2. Operating expenses

3. Operating income

b. What conclusions can you draw from your analysis of the revenue and the total operating expenses?

a.

To determine

Horizontal analysis of income statement:

In horizontal analysis of income statement, the amount of each item of the current year financial statement is compared with the previous year financial statement. The amount of each item increased or decreased in the current income statement, and its respective percentage can be computed by taking the earlier statement as the base.

The amount of change in millions, and the percentage of change from the prior year to the recent year.

Explanation

In the horizontal analysis of income statement, the amount of increase or decrease of each item in the current income statement, and its respective percentage are computed by taking the prior year as the base [

b.

To determine

To discuss: The conclusions drawn from the analysis of the revenue, and the operating expenses.

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