Question

Net income for year 1 was $75,000, and net income for year 2 was $90,000. what is the percent of increase or decrease in horizontal analysis?

Answer 1

The percentage increase in the net income will be given by:
PI=(New value-Past value)/(Past value) × 100
New value=90000
Past value=70000
PI=(90000-70000)/70000 × 100
=20000/70000 × 100
=28 4/7 %
The percentage increase is 28 4/7%

Answer 2

given that , Net income for year 1 = $75,000 net income for year 2 = $90,000 . THE DIFFERENCE between the net of years is $90,000-$75,000 = $15000 . THE percentage of increase or decrease in horizontal analysis is = ( $15,000/$75000 )*100 = 20% INCREASE IN horizontal analysis