Question

Income statements for Benson Company for 2018 and 2019 follow:

BENSON COMPANY Income Statements
	2019				2018
Sales	$	201,900			$	181,900
Cost of goods sold		143,600				121,600
Selling expenses		21,900				19,900
Administrative expenses		12,200				14,200
Interest expense		3,300				5,300
Total expenses	$	181,000			$	161,000
Income before taxes		20,900				20,900
Income taxes expense		6,600				3,500
Net income	$	14,300			$	17,400

Required

1. Perform a horizontal analysis, showing the percentage change in each income statement component between 2018 and 2019.

2. Perform a vertical analysis, showing each income statement component as a percentage of sales for each year.

Answer 1