Comparative Income Statement For the year ended 31 December 2019 and 2018 2019 Sales 1,025,000 Less: Returns and sales allowances 25,000 Net sales 1,000,000 Less: Cost of goods sold 680,000 Gross profit 320,000 Minus: Operating expenses 130,000 Sales spending 65,000 Administrative expenses 195.000 Total operating expenses 125,000 Operating income 5,000 Plus: Other income 130,000 Less: Other expenses 21,000 Income before income tax 109,000 Less: Income tax expenses 60,000 Net income 49,000 2018 651,520 11,520 640,000 416,000 224.000 92,800 44.800 137,600 86,400 3,840 90,240 12,800 77,440 35,200 42,240 Comparative Retained Earnings Statement For the year ended 31 December 2019 and 2018 2019 Retained earnings, January 1st 144,600 Plus: Net income 49,000 Minus: Dividends 193,600 Stocks especially Ordinary stock 8,000 Retained earnings, 31 December 9,000 Retained earnings, January 1st 17,000 Plus: Net income 176,600 2018 116,360 42,240 158.600 8,000 6,000 14,000 144.600 2018 Comparative Balance Sheet 31 December 2020 and 2019 2019 Asset Current assets: Cash 35,000 Marketable securities 30,000 Account not yet received 85,000 Inventories 144,000 Prepaid shopping 6,000 Total current assets 300,000 Long-term investment 50,000 Plant and equipment 418,600 Total assets 768,600 Liabilities Current liabilities 150,000 Long term liability: Mortgage outstanding, 10% maturity 2024 82.000 Bonds outstanding, 8%, maturity 2027 160,000 Total long-term liabilities 242.000 Total liabilities 392,000 Owners' equity Shares mainly 8%, par value $100 100.000 Ordinary shares, par value $10 100,000 Retained earnings 176,600 Total owner's equity 376,600 Total liabilities and owner's equity 768.600 25.000 10.000 65,000 96,000 4.000 200.000 45.000 389,600 634,600 130,000 160,000 160,000 290.000 100,000 100.000 144,60 344,600 634.600 a) Horizontal analysis for income statement 2019 and provide analysis and comment of the changes. b) Financial ratios for 2019 (debt ratio, price to earning ratio, and turnover of inventory) c) Reasons why need a high inventory turnover