The Following Is a Summary of Information Presented on the Financial

The following is a summary of information presented on the financial statements of The Cake Company on December 31, 2007.
$$\begin{array} { | l | r | r | } \hline \text { Account } & 2007 & 2006 \\\hline \text { Current assets } & \$ 65,000 & \$ 50,000 \\\hline \text { Accounts receivable } & 80,000 & 75,000 \\\hline \text { Merchandise inventory } & 50,000 & 40,000 \\\hline \text { Current liabilities } & 75,000 & 50,000 \\\hline \text { Long-term liabilities } & 30,000 & 50,000 \\\hline \begin{array} { l } \text { Common stock (2007: } 5,000 \text { shares; } \\\text { 2006: } 4,000 \text { shares) }\end{array} & 50,000 & 40,000 \\\hline \text { Retained earnings } & 40,000 & 25,000 \\\hline & \\\hline \text { Net sales revenue } & \$ 525,000 & \$ 500,000 \\\hline \text { Cost of goods sold } & 400,000 & \underline{395,000} \\\hline \text { Gross profit } & 125,000 & 105,000 \\\hline \text { Selling and general expenses } & 45,000 & 50,000 \\\hline \text { Net income before income tax expense } & 80,000 & 55,000 \\\hline \text { Income tax expense } & \underline{24,000} & \underline{16,500} \\\hline \text { Net income } & \underline{\$ 56,000} & \$ 38,500 \\\hline\end{array}$$ What would horizontal analysis report with respect to net income before income tax expense and net income?

A) Horizontal analysis would report both net income before income tax expense and net income as 45.45% of net sales revenue.
B) Horizontal analysis would report a $25,000 increase in both net income before income tax expense and net income.
C) Horizontal analysis would report a 45.45% increase in both net income before income tax expense and net income.
D) None of the above is correct.