Question: Vertical Analysis of the Income statement

	Company A	Company B
Net sales	2,300,000	300,000
Cost of goods sold	1,100,000	200,000
Gross profit	1,200,000	100,000
Operating Expenses:
Administrative expenses	120,000	20,000
Marketing expenses	220,000	30,000
Research and Development	500,000	10,000
Total Operating expenses	840,000	60,000
Interest expense	200,000	10,000
Net income	160,000	30,000

Required:

1. Prepare a vertical analysis of these two companies.
2. Compare and contrast the financial situation of these two companies assuming that they are in the same industry. Discuss fully.