79 Cardinancial Analysis Profitability ratios (L03-2) 7. The Haines Corp. shows the following financial data for 20% 1 and 20X2: Sales Cost of goods sold Gross profit Selling & administrative expense Operating profit Interest expense Income before taxes Taxes (35%) Income after taxes 20X1 $3.230.000 2,130.000 $1,100,000 298,000 $ 802.000 47,200 $ 754,800 264,180 $ 490,620 20X2 $3,370,000 2.850,000 $ 520.000 227,000 $ 293,000 51,600 $ 241,400 84,490 156,910 For each year, compute the following and indicate whether it is increasing or decreasing profitability in 20X2 as indicated by the ratio: a. Cost of goods sold to sales. b. Selling and administrative expense to sales. expenses to sales. and $1,400,000 of Profitability ratios