The financial statements for Richardson Socks Company follow.

Richardson Socks Company

Consolidated Income Statements

(In thousands except per share data)

Richardson Socks Company
Consolidated Balance Sheets
(In thousands)

Required:
1. Prepare common size income statements to be used for horizontal analysis for Richardson for 2017 and 2019 (in percentage terms, rounded to two decimal places). Utilize 2017 as the base year for both 2018 and 2019. You do not need to include the actual dollar amounts shown above.
2. Indicate why Richardson's net income increased between 2017 and 2019.
3. Prepare common size balance sheets to be used for vertical analysis for 2019 and 2018 (in percentage terms, rounded to two decimal places). You do not need to include the actual dollar amounts shown above.
4. Determine whether the proportion of dollars invested in the various categories of assets has changed significantly between 2018 and 2019.
5. Determine whether the proportion of capital raised from the various liability categories and common stockholders' equity has changed significantly between 2018 and 2019.
6. How would you describe Richardson's performance and financial position?

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Year ended December 31, 2018 2019 2017 Revenues Costs and expenses: Cost of goods sold Selling and administrative $4,102,721 $3,178,569 $1,952,123 598,236 31,853 (102) $3,652,412 $2,234,985 653,986 32,596 $2,256,236 927,412 23,974 1,925 $3,209,547 $ 893,174 Interest Other expenses (income) Total costs and expenses Income before income taxes Income taxes Net income 2,254 $2,923,821 $ 728,591 $2,582,110 $ 596,459 183,456 $ 545,135 163,524 $ 645,482 $ 432,935 December 31, 2019 ASSETS 2018 Current assets: Cash and equivalents Accounts receivable, less allowance for doubtful accounts of $20,568 and $18,322 $ 301,695 $ 269,648 670,469 601,396 604,236 469,582 Inventories