Income statements for Sennett Company for 2008 and 2009 follow.
|
2009
|
2008
|
|
Sales
|
$121,000
|
$92,000
|
|
Cost of goods sold
|
75,000
|
51,000
|
|
Selling expenses
|
20,000
|
11,000
|
|
Administrative expenses
|
12,000
|
14,000
|
|
Interest expense
|
3,000
|
5,000
|
|
Total expenses
|
110,000
|
81,000
|
|
Income before taxes
|
11,000
|
11,000
|
|
Income taxes expense
|
3,000
|
2,000
|
|
Net income
|
$ 8,000
|
$ 9,000
|
Required
a. Perform a horizontal analysis, showing the percentage change in each income statement component between 2008 and 2009.
b. Perform a vertical analysis, showing each income statement component as a percent of sales for each year.