Answer:
FEDERER SPORTS APPAREL  
Income Statement  For the Years Ended December 31
                                                    Years                        Increase /(Decrease)
                                          2019            2018                    Amount      %
Net sales                      18,800,000    15,500,000      3,300,000    21.29%  
Cost of goods sold      13,200,000     7,000,000      6,200,000    88.57%
Gross profit                   5,600,000     8,500,000     (2,900,000)   -34.12%
Operating expenses     1,600,000      1,200,000         400,000     33.33%
Depreciation expense  1,000,000      1,000,000       0                   0
Inventory write-down     200,000       0                      200,000      100%
Loss (litigation)             1,500,000         300,000       1,200,000    400%
Net Income                $1,300,000    $6,000,000      (4,700,000)     78.33%
Explanation:
a) Federer Sports Apparel can use horizontal analysis as a technique for analyzing the financial statement changes over a period of time.  It is a useful tool for Federer to evaluate its trend situations, using the financial statements of two years with the earlier year serving as the base year (or independent variable) while the latter year is the dependent variable.