Eikner, Inc. operates two small clothing stores in southeastern Idaho. Following are this company€™s income statements for the years ended December 31, 2007 through 2009, and year-end balance sheets for 2007 through 2009.

Required:
(a) Prepare common-sized income statements for Eikner, Inc. for 2007 through 2009.
(b) What major structural changes occurred over this three-year period in Eikner€™s income statement data? Are these changes apparently favorable or unfavorable? Explain.

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Eikner, Inc Income Statements For the Years Ended December 31,2007-2009 2007 2008 2009 Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Income Other Revenue (Expense) 641,900 S 652,000 654,500 (304,500) (323,700) (339,200) 337,400S 328,300 315,300 154,200) (155,800) (161,900) 183,200 S 172,500 153,400 13,400(6,400) 200) Income before Income Tax 196,600 166,100 S 152,200 me Tax Expense78,600) (66,400) 60,900) Net Income $ 118,000 99,700$ 91,300 All the company's sales are on a credit basis. **Includes interest expense of the following amounts: S8.900 (2007); S7.400 〔2008); and $7,100 (2009) Eikner, Inc. Balance Sheets December 31, 2007-2009 2007 2008 2009 ASSETs Cash Accounts Receivable (net) Inventory Prepaid Expenses Total Current Assets Property & Equipment $22,0009,100 3,700 116,900 109,800 102,000 89,000 1,700 S206,800 $215,800 $211,300 72,500 103,300 2,500 1,400 (net) Other Assets Total Assets 212,000 201,500 189,400 2,600 1,500 $422,000 $419,900 $402,200 3,200 LTADILITIES Accounts Payable Notes Payable Accrued Liabilities Total Current Liabilities $ 51,900 57,200 64,900 15,000 12,000 7,400 $118,000 $108,000 84,300 25,000 41,100 35,800 Bonds Payable 80,000 80,000 $218,000 $188,000 $164,300 100,000 Total Liabilities STOCKHOLDERS EQUITY Common Stock (S1 par $50,000 50,000 50,000 Additional Paid-in Capita 130,000 130,000 130,000 24,000 1,90 57,900 Total Stockholders' Equity $204,000 $231,900 $237,900 value) Retained Earnings Total Liabilities and Stockholder' Equiry $2.000 $419900 $402.200 $422,000 $419,900 $402,200