The question appears to involve interpreting a financial table and performing a horizontal analysis to understand changes in service sales and total revenues over two years. Let's break down the information provided and analyze it step-by-step.
Horizontal analysis involves comparing financial data over a period to identify trends and growth rates. It typically involves calculating the percentage change from one period to the next.
From the table:
- Service sales in the first year: \$90,972
- Service sales in the second year: \$120,114
To calculate the percentage increase in service sales:
\[ \text{Percentage Increase} = \left( \frac{\text{New Value} - \text{Old Value}}{\text{Old Value}} \right) \times 100 \]
\[ \text{Percentage Increase} = \left( \frac{120,114 - 90,972}{90,972} \right) \times 100 \]
\[ \text{Percentage Increase} = \left( \frac{29,142}{90,972} \right) \times 100 \]
\[ \text{Percentage Increase} = 32.0\% \]
This matches the percentage increase provided in the table (32.0%).
From the table:
- Total revenues in the first year: \$232,887
- Total revenues in the second year: \$280,522
To calculate the percentage increase in total revenues:
\[ \text{Percentage Increase} = \left( \frac{\text{New Value} - \text{Old Value}}{\text{Old Value}} \right) \times 100 \]
\[ \text{Percentage Increase} = \left( \frac{280,522 - 232,887}{232,887} \right) \times 100 \]
\[ \text{Percentage Increase} = \left( \frac{47,635}{232,887} \right) \times 100 \]
\[ \text{Percentage Increase} = 20.5\% \]
This matches the percentage increase provided in the table (20.5%).
The horizontal analysis shows that:
- Service sales increased by 32.0% from \$90,972 to \$120,114.
- Total revenues increased by 20.5% from \$232,887 to \$280,522.
These increases indicate a strong performance in service sales, contributing significantly to the overall growth in total revenues.
The horizontal analysis confirms that there was a notable increase in both service sales and total revenues between the two years. The service sales saw a particularly strong increase of 32.0%, which is a positive indicator of the company's growth in that area. Total revenues also increased by 20.5%, reflecting overall positive financial performance.
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