The following income statement and vertical analysis data are available for Westman Company:
Westman Company
Consolidated Income Statements
(In thousands)

Required:
1. Suggest why net income increased from $92,500 to $414,900 while the cost of goods sold percentage increased each year and selling and administrative expenses have decreased.
2. Explain what could cause sales to increase while the gross margin percentage decreases?

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Year ended June 30, 2019 Amount 2017 Amount 2018 Amount 100.0 1.0 101.0 Sales Other income, net Total revenues Costs and expenses: Cost of goods sold 100.0 0.7 100.7 100.0 $4,122.0 39.7 $3,566.0 $2,965.0 21.3 1.0 101.0 $4,161.7 $1,893.6 $3,602.7 $2,986.3 45.9 44.2 $1,610.3 45.2 $1,310.8 Year ended June 30, 2018 Amount 1,603.6 69.7 2019 Amount 2017 Amount Selling and administrative Interest Total costs and expenses Income before income taxes $ 596.4 Income taxes expense Net income 39.1 1.5 86.5 50.8 1,610.3 61.4 45.0 1,505.3 63.2 2.0 92.2 2.1 97.1 $3,565.3 $3,283.6 14.5 4.4 10.1 $ 319.1 109.6 $ 209.5 8.9* 3.1 5.9* $2,879.3 107.0 14.5 92.5 3.6 0.5 181.5 $ 414.9 3.1