Income statements for Franklin Company for Year 3 and Year 4 follow:

FRANKLIN COMPANY Income Statements
	Year 4				Year 3
Sales	$	200,400			$	180,400
Cost of goods sold		142,200				120,200
Selling expenses		21,200				19,200
Administrative expenses		12,300				14,300
Interest expense		3,700				5,700
Total expenses	$	179,400			$	159,400
Income before taxes		21,000				21,000
Income taxes expense		6,400				3,800
Net income	$	14,600			$	17,200

Required a. Perform a horizontal analysis, showing the percentage change in each income statement component between Year 3 and Year 4. b. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year.

Perform a vertical analysis, showing each income statement component as a percentage of sales for each year. (Percentages may not add exactly due to rounding. Round your percentage answers to 1 decimal place. (i.e., 0.234 should be entered as 23.4).)

FRANKLIN COMPANY
Vertical Analysis of Income Statements
	Percentage of Sales Year 4		Percentage of Sales Year 3
Sales		%		%
Cost of goods sold
Selling expenses
Administrative expenses
Interest expense
Total expenses
Income before taxes
Income taxes expense
Net income		%		%