$20182017$ Analysis$/$Explaination

Units $80\mathrm{.}062\mathrm{.}5$

Sales $1,200100\%1,000100\%$

COGS $720500$

Gross Profit $480500$

Selling Expense $204250$

Administrative Expense $216150$

Operating Income $60100$

Other Income$($Expense$)84-$

Net Income $144100$

Required:

Using vertical analysis, evaluate the results of operations in $2017$ and $2018.$ Quantify the percentages of each line item to sales.

Evaluate the drivers of net income, including gross profit, selling and administrative expenses, and other income. What is the

overall percentage point change in profitability and what is the contribution $($positive or negative$)$ of each driver. Explain the

effect of each driver on profitability and the possible scenarios of each based on the data above. Which are areas of concern?

Which areas are positive? What additional questions would you have?