Prepare a vertical analysis of Bradford Company’s income statements.

 
   

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PE 3-10B Vertical analysis

Two income statements for Bradford Company are shown below.

Bradford Company

Income Statements

For Years Ended December 31

2012

2011

Fees earned

$825,000

$700,000

Operating expenses

684,750

602,000

Operating income

$140,250

$ 98,000

a. Prepare a vertical analysis of Bradford Company’s income statements.

b. Does the vertical analysis indicate a favorable or unfavorable trend?