Horizontal Analysis. Smith Corporation provides the following comparative income statement: Smith Corporation Comparative Income Statement For the Years Ended December 31, 20X3 and 20X2 20X3...

Horizontal Analysis. Smith Corporation provides the following comparative income statement:

Smith Corporation Comparative Income Statement For the Years Ended December 31, 20X3 and 20X2

20X3                      20X2

Sales                                      $570,000             $680,000

Cost of goods sold           200,000                170,000

Gross profit                        $370,000             $510,000

Operating expenses       100,000                210,000

 EBIT                                      $270,000             $300,000

(a) Calculate the percentage change using horizontal analysis and (b) evaluate the results.