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Question 2 [30 points] XYZ Corporation's income statement and balance sheet are given below. a) Express this information as vertical trend percents. Please make sure your final answer(s) are in percentage form and are accurate to 2 decimal places. (For example: 12.34%) XYZ Corporation Income Statement Vertical Trend Percentages (%) 2016 2015 2014 2016 2015 2014 Sales $1,645,000 $1,322,000 $1,078,000 Cost of goods sold. 958,000 904,000 789,000 Gross profit from sales. 687,000 418,000 289,000 Operating expenses. 189,000 178,000 169,000 Income before tax 498,000 240,000 120,000 Income taxes expense 149,000 72,000 36,000 Net income $349,000 $168,000 $84.000 Cash Accounts receivable, net. Prepaid expenses Merchandise inventory.. Plant assets, net Total assets Accounts payable Long-term notes payable... Share capital (100,000 issued). Retained earnings Total liabilities and equity. XYZ Corporation Balance Sheet Vertical Trend Percentages (%) 2016 2015 2014 2016 2015 2014 $237,000 $134,000 $99,000 391,000 337,000 299,000 369,000 318,000 272,000 206,000 178,000 163,000 226,000 206,000 192,000 $1,429,000 $1,173,000 $1,025,000 $13,000 $12,000 $10,000 386,000 311,000 256,000 304,000 269,000 256,000 726,000 581,000 503,000 $1,429,000 $1,173,000 $1,025,000 b) Assuming all other things are constant, indicate whether the vertical trend between net income and operating expenses is favourable or unfavourable. The vertical trend is (select one)