Consolidated income statements for Karofsky Computer follow.

Required:
1. Prepare common size income statements for horizontal analysis (in percentage terms, rounded to two decimal places). You do not need to include the actual dollar amounts shown above.
2. Explain why net income decreased in 2010 and increased in 2011.

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Karofsky Computer Inc. Consolidated Income Statements (in thousands except per share amounts) Three fiscal years ended December 31 2010 2011 6 2009 Sales Costs and expenses: $9.188,748 $954 $086,542 $6,844,915 $5,248,834 $3,991,337 602,135 1,384,111 1,632,362 1,687,262 Cost of goods sold 564,303 664,564 Selling, general, and administrative Restructuring costs and other 1126,855) 320,856 Operating income Interest and other income, net Income before income taxes Provision for income taxes Net income Earnings per common and common $8,666,474 $7,866,616 $6,280,734 522,274 110,338 805,808 49,634 500,286 139,659 855 442 325,069 $310,178 86,589 530,373 (21,988) 29,321 190,108 53,070 equivalent share $2.61 0.73 $ 4.33 Common and common equivalent shares used in the calculations of earnings per share 118,735 119,125 122 490