Using 2008 as the base year prepare a horizontal analysis

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Reference no: EM13570332

Alpha Company Income Statements (in thousands)

Year ending December 31,
2010 2009 2008
Net Sales
$5,003,837 $4,934,430 $4,881,103
Cost of Goods Sold
2,755,323 2,804,459 2,784,392
Gross Profit
2,248,514 2,129,971 2,096,711
Selling, general, and



administrative exp
1,673,449 1,598,333 1,573,510
Operating Income
575,065 531,638 523,201
Interest Expense
61,168 71,971 80,837
Interest and net investment



expense (income)
(5,761) (6,482) (8,278)
Other expense-net
29,540 26,046 23,365
Income before income taxes 490,118 440,103 427,277
Income taxes
186,258 167,239 166,663
Net Income
$303,860 $272,864 $260,614

Requirements:

1. For each of the years shown, prepare a vertical analysis, using sales as the base. Write a paragraph explaining what the analysis shows.

2. Using 2008 as the base year, prepare a horizontal analysis for sales and cost of goods sold. What information does this analysis give you?

Reference no: EM13570332

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