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: Question not attempted.

Clapton Company Comparative Income Statement For the Years Ended December 31, 2016 and 2015

1 2016 2015 2 Sales $8,887,500.00 $7,900,000.00 3 Cost of goods sold 3,265,333.00 2,633,333.00 4 Gross profit $5,622,167.00 $5,266,667.00 5 Selling expenses $1,171,800.00 $930,000.00 6 Administrative expenses 725,000.00 580,000.00 7 Total operating expenses $1,896,800.00 $1,510,000.00 8 Income from operations $3,725,367.00 $3,756,667.00 9 Other income 143,000.00 130,000.00 10 Income before income tax $3,868,367.00 $3,886,667.00 11 Income tax expense 46,000.00 40,000.00 12 Net income $3,822,367.00 $3,846,667.00

Required: 1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 2015 as the base year. Use the minus sign to indicate an amount or percent decrease. If required, round percentages to one decimal place. 2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis.