The following income statements were drawn from the annual reports of Toner Sales Company:

*All dollar amounts are reported in thousands.
The president's message in the company's annual report stated that the company had implemented a strategy to increase market share by spending more on advertising. The president indicated that prices held steady and sales grew as expected. Write a memo indicating whether you agree with the president's statements. How has the strategy affected profitability? Support your answer by measuring growth in sales and selling expenses. Also prepare common size income statements and make appropriate references to the differences between 2018 and 2019.

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2018 2019 Net sales Cost of goods sold Gross margin Less: Operating expense 200,000 $200.000 (90,000) (80,000 110,000 120,000 Selling and administrative expenses (60,000) 50,000) Net income 50,000 70,000