The income statements for Federer Sports Apparel for 2025 and 2024 are presented below.
Required:
Prepare a vertical analysis of the data for 2025 and 2024. (Round your percentage answers to 1 decimal place.)
Answer is complete but not entirely correct.
FEDERER SPORTS APPAREL
Income Statement
For the Years Ended December 31
2025
Amount
%
2024
Amount
%
Net sales
$ 17,800,000
100.0 $ 14,500,000
100.0
Cost of goods sold
13,563,600
76.2
6,409,000
44.2
Gross profit
4,236,400
23.8
8,091,000
55.8
Operating expenses
1,335,000
7.5
971,500
6.7
Depreciation expense
765,400
0.1
797,500
0.0
Inventory write-down
17,800
0.0
0
1.4
Loss (litigation)
1,246,000
7.0
203,000
4.2
Income before tax
872,200
4.9
6,119,000
42.2
Income tax expense
249,200
1.4
1,725,500
11.9
Net income
$ 623,000
3.5 $ 4,393,500
30.3