The following comparative income statement (in thousands of dollars) for the current year ending January 29, and the preceding year ending February 1, was adapted from an annual report of Dell Computer Corporation:

a. Prepare a comparative income statement for both years in vertical form, stating each item as a percent of revenues. Round to one digit after the decimal place.

b. Based upon (a), comment on the significant changes.

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Current Year Preceding Year $12,327,000 Revenues Costs and expenses: Cost of sales $18,243,000 14,137,000 Gross profit Operating income Selling, distribution, and administrative expenses $ 4,106,000 2,060,000 $ 2,046,000 9,605,000 $ 2,722,000 1,406,000 $ 1,316,000