Vertical Analysis of Income Statement Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows: Sales Cost of goods sold Selling expenses Administrative expenses Income tax expense Sales Cost of goods sold Selling expenses a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all a Innovation Quarter Inc. Comparative Income Statement For the Years Ended December 31 Administrative expenses Current Year Income tax expense $515,000 329,600 72,100 82,400 10,300 Previous Year 72,100 82,400 $453,000 262,740 77,010 67,950 18,120 Current year Amount Current year Percent $515,000 % 329,600 10,300 % % % % % % % % Previous year Amount Previous year Percent $453,000 % 262,740 $ 77,010 67,950 18,120 b. The vertical analysis indicates that the cost of goods sold as a percent of sales by 1 percentage points. Thus, net income as a percent of sales % % % % % % % % by 6 percentage points, while selling expenses by 2 percentage points.

Vertical Analysis of thcome statement Revenue and expense data for Innowation Quarter Inc, for two recent years are as follows: a. Prepare an income statement in comparative form, stating each item for both vears as a percent of sales. If required, round percentages to one decimal Dlace. Enter all b. The vertical analysis indicates that the cost of goods sold as a percent of sales by 6 percentage points, while selling expenses by 1 percentage points. Thus, net income as a percent of ales. by 2 percentage points