The Haines Corp. shows the following financial data for 20X1 and 20X2: For each year, compute the following ratios and indicate how the change in each ratio will affect profitability in 20X2.

	20X1			20X2
Sales	$	2,520,000		$	3,660,000
Cost of goods sold		1,600,000			2,840,000
Gross profit	$	920,000		$	820,000
Selling & administrative expense		279,000			274,000
Operating profit	$	641,000		$	546,000
Interest expense		41,400			48,900
Income before taxes	$	599,600		$	497,100
Taxes (35%)		209,860			173,985
Income after taxes	$	389,740		$	323,115