In 2016, net sales were $1,600,000, and in 2017, net sales were $1,750,000. If you were performing a horizontal analysis, what is the percentage change in sale from the 2016 to 2017?
a. 91.4%
b. 1.1%
THE CORRECT ANSWER
c. 9.4%
d. 8.6%
WHAT YOU NEED TO KNOW
The percentage change in sale from the 2016 to 2017 9.4%.
To calculate the percentage change from 2016 to 2017, first calculate the dollar-value change from 2016 to 2017, calculated as 2017 Net Sales - 2016 Net Sales, $1,750,000 - $1,600,000, which equals $150,000. Next, determine the percentage change by dividing the dollar value change by the Net Sales in the first year, $1,600,000. This results in a percentage change in Net Sales of 9.4%, calculated as $150,000 / $1,600,000.