Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year

Sales $2,280,000 $2,000,000

Cost of goods sold 1,960,000 1,750,000

Gross profit $320,000 $250,000

Selling expenses $156,500 $125,000

Administrative expenses 122,000 100,000

Total operating expenses $278,500 $225,000

Income before income tax $41,500 $25,000

Income tax expense 16,600 10,000

Net income $24,900 $15,000

A. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. (Round percentages to one decimal place.) B. What conclusions can be drawn from the horizontal analysis?