EXERCISE 1–1 Common-size and trend percents for JBC Company’s sales, cost of goods sold, and expenses follow:

COMMON-SIZE PERCENTS TREND PERCENTS 2006 2005 2004 2006 2005 2004 Sales . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0% 104.4% 103.2% 100.0%

Cost of goods sold . . . . . . 62.4 60.9 58.1 112.1 108.2 100.0 Expenses . . . . . . . . . . . . . 14.3 13.8 14.1 105.9 101.0 100.0 Determine whether net income increased, decreased, or remained unchanged in this three-year period.