Questions: Service sales 120,114 90,972 29,142 32.0% Total revenues ... 280,522 232,887 47,635 20.5% Operating expenses: b. The horizontal analysis shows that total revenues increased between the two years, with a strong increase in service sales. Service sales

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.