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question 1 Conduct a horizontal analysis of the Balance Sheet and Income Statement...

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Question

Accounting

question 1

Conduct a horizontal analysis of the Balance Sheet and Income Statement items, analyze thetrends, identify problems. (20 points)

Conduct a common size analysis of the Balance Sheet and Income Statement items,comment on the results. (20 points)

Combine the results of the horizontal and common size analyses and make a comprehensive commentary of the firms financial health. (30 points)

AVIS RENT-A-CAR

INCOME STATEMENT ($

millions)

2015

2016

2017

2018

2019

Sales

24,455

25,477

26,858

28,374

30,052

Cost of Goods Sold

20,391

21,448

22,480

24,023

24,826

Gross Profit

4,064

4,029

4,378

4,351

5,226

Depreciation

1,374

1,391

1,426

1,416

1,425

Operating Profit

2,690

2,638

2,952

2,935

3,801

Interest Expense

655

955

2,215

2,021

1,987

Non-Operating

Income/Expense

412

179

661

256

188

Pretax Income

2,327

1,862

1,398

1,170

2,002

Total Income Taxes

725

625

316

268

627

Minority Interest

178

201

208

229

321

Net Income

1,424

1,036

874

673

1,054image

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