Texts: Conduct a HORIZONTAL analysis for the Years Ended Dec. 31, 2021 and 2022 (6 MARKS). Compared to the change in the year-over-year sales, comment on whether the company is operating efficiently in 2022 (compared to 2021).
DEC 31, 2021 DEC 31, 2022
Sales $2,600,000 $2,360,000
Less Returns $200,000 $180,000
Net Sales $2,400,000 $2,180,000
COGS $1,200,000 $1,038,000
Gross profit $1,340,000 $1,142,000
Operating expenses
Administrative $710,000 $653,000
Marketing & Advertising $80,000 $76,000
Depreciation $40,000 $30,000
Total Operating Expenses $830,000 $759,000
Operating profit $510,000 $383,000
Income taxes @ 50% $255,000 $191,500
Net income $255,000 $191,500