a nearby city has had one for two years. She shared her results, below: $ The Tree Pruning Company Income Statements for the year ended December 31, 2010 Sales $ 75,000 Less: Cost of goods sold 37,000 Gross profit 38,000 Less: Operating costs 28,000 Earnings before interest and taxes (EBIT) 10,000 Less: Interest expense 3,000 Earnings before taxes 7,000 Less: Income tax expense 2,800 Net income 4,200 2009 62,000 30,000 32,000 24,000 8,000 15,000 3,000 1,200 1,800 Required: (a) Prepare a horizontal and vertical analysis on the income statement. (b) Should you buy a franchise? a + Page 3 1 14