Otley Company does business in two customer segments, Retail and Wholesale

Otley Company does business in two customer segments, Retail and Wholesale. The
following annual revenue information was determined from the accounting system’s
invoice information:


2014 2013
Retail $110,000 $ 92,000
Wholesale 140,000 164,000
Total revenue $250,000 $256,000




Prepare a horizontal and vertical analysis of the segments. Round to one decimal place.


Answer:

Horizontal analysis:
2014 2013
Increase/(Decrease)
Amount Percent
Retail $110,000 $ 92,000 $ 18,000 19.6%
Wholesale 140,000 164,000 (24,000) –14.6%
Total revenue $250,000 $256,000 $ (6,000) –2.3%
Vertical analysis:
2014 2013
Amount Percent Amount Percent
Retail $110,000 44.0% $ 92,000 35.9%
Wholesale 140,000 56.0% 164,000 64.1%
Total revenue $250,000 100.0% $256,000 100.0%