Osgood Company Provided the Following Income Statement for Year 1

Essay

Osgood Company provided the following income statement for Year 1 and Year 2:
$\begin{array}{lrr}&\text { Year } 2 & \text { Year } 1\\\text { Sales } & \$ 220,000 & \$ 160,000\\\text { Cost of goods sold } & \underline{156,000}& \underline{ 105,000}\\\text { Gross margin } & 64,000 & 55,000\\\text { Less operating expenses: }\\\text { Selling and administrative expenses } & 26,000 & 15,000 \\\text { Interest expense } & \underline{ 2,000 }& \underline{ 3,000} \\\text { Income before tax } & 36,000 & 37,000 \\\text { Income tax expense } & \underline{10,800} & \underline{11,100 }\\\text { Net income } & \underline{ \$ 25,200} & \underline{\$ 25,900}\end{array}$
Required:
(a)Perform vertical analysis on Osgood's income statements for Year 1 and Year 2.Round your answer to one decimal place (i.e.,22.4%).
(b)Comment on the results,comparing Year 1 to Year 2.