PROBLEM 14-1. Vertical Analysis of the Income Statement [LO 1, 3] Assume you are the vice

president of operations for HG Lang and you are preparing for a meeting to discuss the 2018 financial results with Adrienne Aiello, the company president.

Required

a vertical analysis of the income statements for 2017 and 2018. Based on this analysis,

what is Adrienne Aiello likely to focus on in your upcoming meeting?

b. During 2018, the company had price increases from its European gown manufacturers. Adrienne Aiello has asked you to estimate what the gross margin would have been for 2018 if the price increase had not occurred.