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QLDAccountingQuick questions
Unit 4: Monitoring a business
Quick questions on Horizontal, vertical and trend analysis in QCE Accounting Unit 4
2short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is vertical analysis (cost of goods sold as a percentage of net sales)?Show answer
Cost of goods sold climbed from 60 percent to 64 percent of sales, confirming that the gross profit margin is shrinking even though total sales grew.
What is trend analysis (net sales, Year 1 = 100)?Show answer
Sales show a clear upward trend (100, 115, 127). The story across all three views: sales are growing strongly, but rising cost of goods sold is squeezing the margin, so management should investigate supplier prices or selling prices before the margin erosion offsets the sales growth.
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