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?
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