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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

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BuyFindarrow_forward

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) were taken from the financial statements of Walmart Stores, Inc:

Chapter 2, Problem 2.24EX, Horizontal analysis of income statement The following data (in millions) were taken from the

a. For Walmart Stores, Inc., determine the amount of change in millions and the percent of change (round to one decimal p lace) from the prior year to the recent year for:

1. Revenue

2. Operating expenses

3. Operating income

b. Comment on the results of your horizontal analysis in part (a).

c. Based upon Exercise 2-23, compare and comment on the operating results of Target and Walmart for the recent year.

(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

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

Incorporation W

Income statements

For the year ended

Particulars

Recent year

(a)

Prior

Year

(b)

Increase/(Decrease)
Amount (in million $) (c)=(a)(b)

Percentage

(d)=<

(b)

To determine

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

(c)

To determine

To compare: The conclusions on the operating results of Corporation T and Incorporation W.

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