SKAN LTD COMPARATIVE INCOME STATEMENTS FOR THE YEAR ENDING 31ST DECEMBER 2007 AND 2008. 2008 2007 GH000 GH000 Net Turnover 986,400 765,500 Cost of Sales 623,200 500,900 Gross Profit 363,200 264,600 Operating Expenses Selling expenses 132,500 84,900 Administrative expenses 120,300 98,600 Total operating expenses 252,800 183,500 Net operating expenses 110,400 81,100 Other expenses 3,000 2,800 Profit before tax 107,400 78,300 Less Tax 48,300 31,700 Profit after tax transferred To Income Surplus 59,100 46,600 SKAN LTD INCOME SURPLUS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 2008 2007 GH000 GH000 Bal b/f 180,400 146,300 Net profit for the year 59,100 46,600 239,500 192,900 Less: Dividend declared 15,000 12,500 Bal. c/f 224,500 180,400 SKAN LTD COMPARATIVE BALANCE SHEET FOR THE YEAR 31ST DECEMBER 2008 2007 GH000 GH000 GH000 GH000 Non-current assets: Land 21,000 21,000 Building: (Cost) 205,000 160,000 Less: Accum. Deprn. 27,000 178,000 22,400 137,600 Furniture & fixtures(cost) 83,200 69,800 Less:Accum. Deprn 20,800 62,400 14,100 55,700 261,400 214,300 Current assets: Stock 110,800 94,500 Debtors 124,200 132,600 Prepaid expenses 3,600 4,700 Bills receivable 55,000 50,000 Cash & bank balance 80,200 55,000 Total current assets 373,800 336,800 Total assets 635,200 551,100 Represented by Stated capital & surplus: Stated capital (equity) 240,000 200,000 Income surplus 224,500 180,400 464,500 380,400 Long term liabilities: 12% debentures, 2020 43,600 60,800 Current liabilities: Creditors 70,300 64,600 Bills payable 20,000 15,100 Taxes 36,800 30,200 Total current liabilities 127,000 109,900 Capital & surplus. & total liab. 635,200 551,100 You are required to undertake a horizontal (absolute changes and percentage changes over time) and vertical analysis (common-size statements) for SKAN LTD.

Beliefly explain the answer from the income statement for both horizontal and vertical analysis for the company.