Question: Using the following data, (1) Prepare comparative common-size income statements for years 1 and 2 and (2) Briefly outline why return on sales is lower

Using the following data,
(1) Prepare comparative common-size income statements for years 1 and 2 and
(2) Briefly outline why return on sales is lower in year 2 (1.8%) compared to year 1(7.0%).

Year 2 Year 1 Sales Cost of goods sold. Gross profit Operating expenses Operating income. Interest expense. Income before income taxes Income tax expense Net incorne $80,000 $100,000 70,000 25,000 $ 5,000 2,000 3000 S30,000 $10,000 8,000 5,600 $ 1,800

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