A condensed income statement for Simultech Corporation and a partially completed vertical analysis are presented below.

Required:
1. Complete the vertical analysis by computing each line item (a)-(f) as a percentage of sales revenues. Round to the nearest whole percentage.

2. Does Simultech’s Cost of Goods Sold for the year ended January 31, 2010, as a percentage of revenues, represent better or worse performance as compared to that for the year ended January 31, 2009?
3. Do the percentages that you calculated in 1 (c) and (f) indicate whether Simultech’s net profit margin has changed over the two years?

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SIMULTECH CORPORATION Income Statement (summarized) (in millions of U.S. dollars) For the Years Ended January 31, 2010 January 31, 2009 Sales Revenues $2,062 100% $2,200 100% Cost of Goods Sold 1,637 79 1,721 (d) Selling, General, and Administrative Expenses 333 (a) 346 16 Other Operating Expenses Interest Expense Income before Income Tax Expense Income Tax Expense 53 3 12 1 22 (b) 26 1 17 1 95 (e) 6 0 33 1 Net Income $ 11 (c)% $ 62 (9%