The income statements of High Noon Corp. for the past two years are as follows:

Required
Prepare and interpret a vertical analysis of High Noon's income statements. Round percentages to one decimal point (i.e., 12.8%). What was the most significant reason for the change in profitability?

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Income Statements For the Years Ending December 31 2012 2011 Sales S725,000 $700,000 345,000 385,000 380,000 315,000 75,000 180,000 S205,000 $135,000 5,00040,000 $160,000 95,000 30,000 105,000 65,000 Cost of goods sold Gross profit Operating expenses Interest expense Income tax expense Operating income Income before taxes 55,000 Net income