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8. Using the following information to prepare a vertical analysis of a common size income statement. (8 pts) 2019 Common Size Percentage Sales Revenue Costs
8. Using the following information to prepare a vertical analysis of a common size income statement. (8 pts) 2019 Common Size Percentage Sales Revenue Costs of Goods Sold Gross Profit Selling $100,000 70,000 30,000 20,000 & Admin Expenses Interest Expense Income Before Income Tax | Income Tax Expense Net Income 1,500 8,500 1,500 $7,000 a. If the Gross Profit percentage was 35% in 2018 would the change from 2018 to 2019 be a favorable or unfavorable change and why? (2 pts) b. If the Net Profit Margin was 5% in 2018, would the change from 2018 to 2019 be a favorable or unfavorable change and why? (2 pts)
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