Chapter 15, Problem 15.18E

1.

To determine

Vertical Analysis: Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount. Use the following formula to calculate vertical analysis percentage:

$\text{Vertical analysis percentage }=\left(\frac{\text{Specific item}}{\text{Base}\text{amount}}\right)\times 100$

This analysis is otherwise called as common-size statement.

To prepare: Comparative common size income statement for M designs using 2016 and 2015 data.

Given info: Income statement

2.

To determine

To discuss: 2015 versus 2016