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Problem - Vertical analysis - Two income statements for Newman Company are shown below.
Newman Company Income Statements For Years Ended December 31
2012
2011
Fees earned
$405,000
$375,000
Operating expenses
263,500
225,000
Opting income
$141,500
$150,000
Required -
a. Prepare a vertical analysis of Newman Company's income statements.
b. Does the vertical analysis indicate a favorable or unfavorable trend?
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