ed earnings, ear, 40.0% EX 15-4 Vertical analysis of balance sheet OBJ. 1 Balance sheet data for Novak Company on December 31, the end of two recent fiscal years, follows: income 80.0% Current Year Previous Year Current assets $1,300,000 $ 945,000 Property, plant, and equipment 3,000,000 3,150,000 Intangible assets 700,000 405,000 Current liabilities 1,000,000 720,000 Long-term liabilities Common stock 1,500,000 1,575,000 500,000 495,000 Retained earnings 2,000,000 1,710,000 Prepare a comparative balance sheet for both years, stating each asset as a percent of total assets and each liability and stockholders' equity item as a percent of the total liabilities and stockholders' equity. Round to one decimal place. EX 15-5 Horizontal analysis of the income statement OBJ. 1 Income statement data for Moreno Company for two recent years ended December 31, are as follows: Sales Cost of goods sold Gross profit Selling expenses Administrative expenses Total operating expenses Income before income tax Income tax expense Net income Current Year $1,120,000 971,250 $ 148,750 $ 71,250 56,000 $ 127.250 $ 21,500 8,000 $ 13,500 Previous Year $1,000,000 875,000 $ 125,000 $ 62,500 50,000 $ 112.500 $ 12.500 5,000 $ 7,500 a. Prepare a comparative income statement with horizontal analysis, indicating the in- crease (decrease) for the current year when compared with the previous year. Round to one decimal place. b. What conclusions can be drawn from the horizontal analysis?