The following is comparative financial data for JK Martin Company and Stratton Company:

Required
a. Prepare a vertical analysis of the 2012 income data. Round percentages to one decimal point (i.e., 4.8%). Is one company more profitable than the other?
b. Prepare a horizontal analysis of all accounts. Round percentages to one decimal point (i.e., 4.8%). What does this analysis show?
c. Compute the inventory turnover and days in inventory ratios for 2012. Do these ratios change your conclusions about these companies?

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JK Martin Company Stratton Company 2012 2011 2012 2,000,000 2011 Net sales Cost of goods sold ,100,000 Operating expenses 305,000 Income tax expense Cash Inventory Equipment Current liabilities Long-term liabilities 109,000 88,000 29,000 24,800 Common stock, $10 par 490,000 490,000 000 115,000 Retained earnings S550,000 240,000 75,000 6,500 85,070 $82,508 16,100 $15,777 250,000 225,000 70,000 65,600 525,000 500,000 40,000 125,000 65,000 75,000 35,000 30,000 173,000 47520 075 30,289