Income statements for Vernon Company for Year 3 and Year 4 follow: VERNON COMPANY Income Statements Year 4 Sales $ 201,300 Cost of goods sold 143,200 Selling expenses 21,700 Administrative expenses 12,700 Interest expense 3,700 Total expenses $181,300 Income before taxes 20,000 Income taxes expense 5,400 Net income $ 14,600 Year 3 $181,300 121,200 19,700 14,700 5,700 $161,300 20,000 3,400 $ 16,600 VERNON COMPANY Horizontal Analysis of Income Statements Percentage Change over Year 3 Sales % Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income (loss) % VERNON COMPANY Vertical Analysis of Income Statements Percentage of Percentage of Sales Year 4 Sales Year 3 Sales % % Cost of goods sold Selling expenses Administrative expenses Interest expense Total expenses Income before taxes Income taxes expense Net income % %