Vertical analysis

Two income statements for Cornea Company are shown below.

Cornea Company

Income Statements

For Years Ended December 31

2014

2013

Fees earned

$1,640,000

$1,300,000

Operating expenses

869,200

715,000

Operating income

$ 770,800

$ 585,000

a. Prepare a vertical analysis of Cornea Company’s income statements.

b. Does the vertical analysis indicate a favorable or an unfavorable trend?