Perform a vertical analysis of income statement for 2022

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

Investors Corp
Comparative Income Statement

2022 2021
Sales $5,000,000 $4,350,000
Cost of goods sold 3,875,000 3,450,000
Gross margin 1,125,000 900,000
Operating expenses 653,000 548,000
Net operating income 472,000 352,000
Interest expense 72,000 72,000
Net income before taxes 400,000 280,000
Income taxes (30%) 120,000 84,000
Net income 280,000 196,000

(a) Perform a vertical analysis of income statement for 2022 and 2021.

(b) Which year did the company perform better? Why?

Reference no: EM133344983

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