John and Candy Moody operate Western Ski Centers, a small retail ski store in southwest Colorado. The couple is concerned that, despite increasing sales, they appear to be making less money each year. Using an option on their accounting software, you are able to prepare the following graph of income statement data.

Instructions: 

1. What is represented by the top line of the graph? 

2. Explain why the operating income of the business is declining.

Transcribed Image Text:

Dollars (in thousands) $1,000 $900 $800 $700 $600 $500 $400 $300- $100- Analysis of Income Statement $100- $0 20X1 20X2 20X3 20X4 20X5 20X6 Fiscal Year Operating Income Other Expenses Administrative Expenses Selling Expenses Cost of Good Sold