Use the following information to do a horizontal analysis of Marcus Corporation's income statement for the current year and prior year: What is the percentage change in net income?
A)78.00%
B)-22.00%
C)16.73%
D)35.59%

Question

Use the following information to do a horizontal analysis of Marcus Corporation's income statement for the current year and prior year:  What is the percentage change in net income?
A)78.00% 
B)-22.00% 
C)16.73% 
D)35.59%

Quizplus · Accepted Answer

The horizontal analysis of the income statement shows that the net income decreased from $38,189,000 in the prior year to $29,810,000 in the current year. To calculate the percentage change, we use the formula: (Current year net income - Prior year net income) / Prior year net income * 100. So we have: (29,810,000 - 38,189,000) / 38,189,000 * 100 = -0.22 * 100 = -22%. Therefore, the percentage change in net income is a decrease of 22%. Option B is the correct answer.

Use the Following Information to Do a Horizontal Analysis of Marcus