FILE Paste A1 Clipboard 4 5 1. Use vertical analysis to compare profitability. 6 * Fa 7 HOME Calibri INSERT PAGE LAYOUT BIU Y 8 9 Net sales 10 Cost of goods sold 11 Gross profit * Font V 1 X 12 Operating expenses 13 Operating income 14 Other income 15 Income before tax 16 Income tax expense 17 Net income 11 Y A A B C 1 Lake Athletics sells two distinct product lines: Apparel and Equipment. 2 The income statement for each product line appears below. 3 Y Conditional Format as Cell Cells Formatting Table Styles Styles fx Lake Athletics sells two distinct product lines: Apparel and Equipment. G % Alignment Number Amount Perform Vertical Analysis - Excel FORMULAS DATA REVIEW LAKE ATHLETICS Income Statement For the Year Ended December 31, 20X1 Apparel $3,150,000 1,400,000 1,750,000 800,000 950,000 20,000 970,000 241,250 $728,750 Percent D Amount VIEW Equipment $5,550,000 2,720,000 2,830,000 875,000 1,955,000 10,000 1,965,000 491,000 $1,474,750 E Percent Editing 5 X Sign In F Net sales Cost of goods sold Gross profit 2 Operating expenses 3 Operating income 4 Other income 15 Income before tax 16 Income tax expense 17 Net income 18 19 Required: 20 1. Use appropriate Excel formulas to perform vertical analysis and complete the "Percent" columns 21 for both product lines above. Express each amount as a percentage of net sales. 25 22 Note: You should use absolute references in the divisors of all formulas. 23 2. Use the Excel IF function and the completed vertical analysis above to answer each of the questions below: 24 26 27 28 29 30 31 $3,150,000 1,400,000 1,750,000 800,000 950,000 20,000 970,000 241,250 $728,750 Which product line has the highest gross profit %? Which product line has the highest net income %? Sheet1 *** $5,550,000 2,720,000 2,830,000 875,000 1,955,000 10,000 1,965,000 491,000 $1,474,750