Question 3.10: Vertcal Analysis Two income statements for Fortson Company f...
Vertcal Analysis
Two income statements for Fortson Company follow:
Fortson Company Income Statements For the Years Ended December 31, 2019 and 2018 |
||
2019 | 2018 | |
Fees earned.. . . . . . . . . . . . . . . . . . . . . | $425,000 | $375,000 |
Operating expenses.. . . . . . . . . . . . . | \underline{263,500} | \underline{210,000} |
Operating income.. . . . . . . . . . . . . . . | \underline{\$ 161,500} | \underline{\$ 165,000} |
a. Prepare a vertical analysis of Fortson Company’s income statements.
b. Does the vertical analysis indicate a favorable or an unfavorable trend?
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