Percentage Composition Statements. Park Medical Services had a good year in 1998, but its earnings fell slightly from 1997. Darrell Washington, a member of Park's board of directors, thinks that a revised presentation of income statement data would show basic relationships. Income statements for 1997 and 1998 are:

\section*{Required:}
1. Prepare percentage composition (common-sized) income statements for 1997 and 1998.
2. Comment on expense trends. What items might the board want to investigate further? What was the change in the return on revenue?
3. Would a base-year comparison show similar relationships? Why or why not?

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Revenue Operating costs: Materials and supplies. Wages and salaries Rent .... Taxes and insurance Heat and light.. Advertising. Other operating costs Interest expense Income taxes. Total expenses. Net income.. 1998 $91,000,000 1997 $ 85,000,000 $ 5,920,000 $ 5,500,000 40,200,000 36,500,000 725,000 725,000 4,200,000 3,400,000 980,000 850,000 1,480,000 1,275,000 13,880,000 12,700,000 7,250,000 7,350,000 $80,885,000 6,250,000 $10,115,000 6,300,000 $ 74,600,000 $ 10,400,000