For $2016,$ Clapton Company reported a decline in net income. At the end of the year, S$.$ Hand, the president, is presented with the following condensed comparative income statement:

Comparative Income Statement for Years Ending December $31,2016$ and $2015$

Year: $2016$

Sales: $$6,750,000$

Cost of goods sold: $$2,480,000$

Gross profit: $$4,270,000$

Selling expenses: $$1,260,000$

Administrative expenses: $$625,000$

Total operating expenses: $$1,885,000$

Income from operations: $$2,385,000$

Other income: $$110,000$

Income before Income tax: $$2,495,000$

Income tax expenses: $$60,000$

Net income: $$2,435,000$

Year: $2015$

Sales: $$6,000,000$

Cost of goods sold: $$2,000,000$

Gross profit: $$4,000,000$

Selling expenses: $$1,000,000$

Administrative expenses: $$500,000$

Total operating expenses: $$1,500,000$

Income from operations: $$2,500,000$

Other income: $$100,000$

Income before Income tax: $$2,600,000$

Income tax expenses: $$50,000$

Net income: $$2,550,000$

INSTRUCTIONS

Prepare a comparative income statement with horizontal analysis for the two$-$year period, using $2015$ as the base year. Round to one decimal place.

To the extent the data permits, comment on the significant relationships revealed by the horizontal analysis.