Rafael, your newly appointed boss, has tasked you with evaluating the following financial data for Water and Power Co. to determine how Water & Power's value has changed over the past year. The investment firm for which you work will make a positive (or "buy") recommendation to its investing clients if Water & Power's value has increased over the past year, a neutral (or "hold") recommendation if the value has remained constant, or a negative (or "sell") recommendation if the value has decreased. He has recommended that you use several metrics to ascertain how the firm's value has changed, and he has provided you with the following income statement and balance sheet. Water and Power Co. Income Statement January 1 December 31, Year 2 Year 2 Year 1 Sales $7,350,000 $7,000,000 Expenses 5,880,000 5,740,000 EBITDA $1,470,000 $1,260,000 Depreciation and amortization expense 257,250 245,000 EBIT $1,212,750 $1,015,000 Interest expense 220,500 175,000 EBT $992,250 $840,000 Tax expense (40%) 396,900 336,000 Net income $595,350 $504,000 Common dividends $357,210 $302,400 Addition to retained earnings $238,140 $201,600 Excludes depreciation and amortization