The president is concerned that net income is down even though sales have increased during the year. The president is also concerned that administrative expenses have increased because the company made a concerted effort to cut waste out of the organization.

Express each year's income statement in common-size percentages.

A comparative income statement is given below for Ryder Company: Ryder Company Comparative Income Statement This Year Last Year $7,340,000 $5,505,000 4,990,400 3,512,500 Sales Cost of goods sold Gross margin Selling and administrative expenses: 2,349,600 1,992,500 Selling expenses Administrative expenses 1,473,000 1,074,000 707,500 Total selling and administrative expenses2,180,500 169,100 614,500 1,688,500 304,000 Net operating income Interest expense 97,000 86,000 Net income before taxes $ 72,100 218,000