Vertical analysis OBJ. 5 Two income statements for Hemlock Company follow:

Hemlock Company Income Statements For Years Ended December 31 2016 2015 Fees earned $725,000 $615,000 Operating expenses 435,000 356,700 Operating income $290,000 $258,300

a. Prepare a vertical analysis of Hemlock Company’s income statements.

b. Does the vertical analysis indicate a favorable or an unfavorable trend?