The following items were taken from the financial statements of Hinz, Inc., over a four-year period:
Item 2011 2010 2009 2008
Net Sales $725,000 $640,000 $575,000 $500,000
Cost of Goods Sold 530,000 480,000 435,000 400,000
Gross Profit $195,000 $160,000 $140,000 $100,000
Instructions
Using horizontal analysis and 2008 as the base year, compute the trend percentages for net sales, cost of goods sold, and gross profit.
Explain whether the trends are favorable or unfavorable for each item.