Response to the following problem:
The following data (in millions of dollars) were adapted from the January 29, 2005 and 2004 financial statements of The GAP Inc.:
For year ending 2005 2004
Sales $16,267 $15,854
Cost of sales 9,886 9,885
Operating expenses 4,296 4,068
1. Prepare a horizontal analysis income statement for GAP that includes gross profit and operating income before taxes. Round to one decimal place.
2. Comment on the results of your horizontal analysis of GAP.