Income statements for Burch Company for 2018 and 2019 follow:
______________________________2019 2018
Sales.................................... $240,000.............................. $200,000
Cost of goods sold..................... 180,000............................... 124,000
Selling expenses.......................... 26,000................................. 20,000
Administrative expenses................ 12,000................................. 18,000
Interest expense........................... 7,500.................................. 8,000
Total expenses......................... $225,500.............................. $170,000
Income before taxes......................... 14,500................................. 30,000
Income taxes expense.................... 1,200................................... 3,000
Net income............................. $ 13,300............................... $ 27,000
Required
Round all percentages to one decimal point.
a. Perform a horizontal analysis, showing the percentage change in each income statement component between 2018 and 2019.
b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year.