The financial statements for Jane's Shoes, Inc., appear shown below:

Required:

1. Prepare common income statements to be used for horizontal analysis for Jane's Shoes for 2007 to 2009.
2. Indicate why Jane's net income increased between 2007 and 2009.
3. Prepare common size balance sheets to be used for vertical analysis for 2009 and 2008.
4. Indicate whether the proportion of dollars invested in the various categories of assets has changed significantly between 2008 and 2009.
5. Indicate whether the proportion of capital raised from the various liability categories and common shareholders' equity has changed significantly between 2008 and 2009.
6. Describe Jane's performance and financialposition.

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Jane's Shoes, Inc. Income Statement Year Ended December 31 (In thousands, except per share data) 2009 2008 2007 0984 3405211 610 $3,003,610 Revenues Costs and expenses: $2,089,089 761,498 30,665 $2,386,993 Cost of goods sold Selling and administrative Interest Other expenses (income) $1,850,530 664,061 27 316 922,261 25,739 1,475 2,141 Total costs and expenses Income before income taxes Income taxes Net income $3,336,468 $ 594,516 S 521,818 192,600 $ 461,746 174,700 229,500 $ 365,016 Jane's Shoes, Inc. Balance Sheets (In thousands) December 31 ASSETS 2009 2008 Current assets: $ 291,284 $ 260,050 Cash and equivalents Accounts receivable, less allowance for doubtful accounts of $19,447 and $20,046 Inventories Deferred income taxes Prepaid expenses 667,547 592,986 26,378 42,452 $1,620,647 596,018 471,202 27,511 32,977 Total current assets December 31, ASSETS 2009 2008 Property, plant, and equipment $ 571,032 Less accumulated deprediation Net property, plant, and equipment Goodwill Other assets Total assets $ 497,795 151,758 S 346,037 110,363 28,703 193,037 157,894 30,927 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities nt portion of long-term debt Curre Notes payable Accounts payable Accrued liabilities Income taxes payable $ 52,985 108,165 135,701 138,563 17,150 $ 452,564 15,033 29,965 43,575 $ 3,652 105,696 134,729 134,089 42,422 420,588 77,022 27,074 23,728 Total current liabilities Long-term debt Noncurrent deferred income taxes r noncurrent liabilities Commitments and contingencies Redeemable preferred stock Total liabilities Shareholders' equity: 300 $ 541,437 300 548,712 Common stock at stated value Class A convertible-26,691 and 26,919 159 $161 shares outstanding Class B-49,161 and 48,591 shares outstanding Capital in excess of stated value Treasury stock (common at cost) Retained earnings Total shareholders' equity 2,720 108,451 (7,790) 1,542,486 $1,646,026 $2,187,463 2,716 93,799 (6,860 1,234,333 $1,324,149 $1,872,861 Total liabilities and shareholders' equity