Financial information for Ridge Ltd is as follows.

2016 2015

sales $ 1,500,00 $1,350,000

cost of sales 745,000 738,000

selling expenses 123,000 105,000

administrative expenses 92,000 81,000

income tax expense 162,000 127,800

profit 378000 298,200

Required:

(a) a schedule showing a vertical analysis for 2016 and 2015. Show workings.

(b) Write a brief report outlining the results of your analysis for a potential investor and advise if the investor should invest in Ridge Ltd.