Vera Bradley, Inc. (VRA) is a leading designer, producer, and retailer of fashion handbags, accessories, and travel items for women. Income statements for two recent years for Vera Bradley are as follows:

a. Prepare a horizontal analysis of the two income statements.
b. Assume you are a stockholder of Vera Bradley. Would you be inclined to view Vera Bradley’s change in operating income favorably or unfavorably?

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Vera Bradley, Inc. Income Statements For the Years Ended January 31 (in millions) Year 2 Year 1 $ 416.1 $ 454.6 Revenue Expenses: Cost of merchandise sold... Selling, general, admin. expenses (net). Total expenses Operating income $(177.5) $(200.6) (211.5) (239.0) $(389.0) $(439.6) $ 27.1 $ 15.0