For 2008, Industrial Sanitation Systems, Inc. initiated a sales promotion campaign that included the expenditure of an additional $26,000 for advertising. At the end of the year, Alex Gonzalez, the president, is presented with the condensed comparative income statement below.
1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to net sales for each of the years. Round to two decimal places.
2. To the extent the data permit, comment on the significant relationships revealed by the vertical analysis prepared in (1).