Perform a vertical analysis of income statement for 2022

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Reference no: EM133328139

Case: The comparative income statement for Hardware Corp. for the two most recent years is shown below.

Hardware Corp
Comparative Income Statement

2022 2021
Sales $15,750,000 $12,480,000
Cost of goods sold 12,600,000 9,900,000
Gross margin 3,150,000 2,580,000
Operating expenses 1,590,000 1,560,000
Net operating income 1,560,000 1,020,000
Interest expense 360,000 300,000
Net income before taxes 1,200,000 720,000
Income taxes (30%) 360,000 216,000
Net income 840,000 504,000

Question 1: Perform a vertical analysis of income statement for 2022 and 2021.
Question 2: Which year did the company perform better? Why?

Reference no: EM133328139

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