The income statement for Davis Manufacturing Inc. are provided for 2 recent years
		2008		2009
Revenue		$ 850,000		$ 750,000
Cost of Goods Sold		340,000		300,000
Gross Profit		$ 510,000		$ 450,000
Expenses
	Salaries	221,000		165,000
	Amortization expense	37,500		37,500
	other operating expense	161,500		142,500
	Total Operating expenses	420,000		345,000
Income form operations		90,000		105,000
Interest expesne		(15,000)		(15,000)
Income tax expense		(22,500)		(27,000)
Net Income		$ 52,500		$ 63,000
Instructions
A.	Use the above infomration to prepare a vertical analysis for Davis
B.	Using the analysis completed in part A., identify the reason for Davis' secreasing net income at the same time that revenue is increasing.
Solution