Complete Requirement 1 of this exercise, which requires you to prepare common size income statements for Xenon Corporation for 2015 and 2014. An example of a common size income statement can be found on page 23-4 of your text.

Common Size Income Statements

Comparative income statements for Xenon Corporation for 2015 and 2014 follow.

Description	2015	2014
Sales	$950,000	$600,000
Cost of goods sold	595,000	325,000
Gross profit	$355,000	$275,000
Selling and general expenses	115,000	94,000
Operating income	$240,000	$181,000
Interest expense	45,000	35,000
Income before income taxes	$195,000	$146,000
Income taxes	72,000	57,000
Net income	$123,000	$89,000

1. Prepare common-size income statements for Xenon Corporation for 2015 and 2014.

2. Return on sales for Xenon is lower inn 2015 than in 2014. What expense or expenses are causing this lower profitability?