A company reported the following income statement amounts:
$$\begin{array} { l c c }
& \text { Year 2 } & \text { Year 1 } \
\text { Sales revenues } & \$ 950,000 & \$ 800,000 \
\text { Operating expenses } & \$ 700,000 & \$ 550,000 \
\text { Income taxes } & \$ 100,000 & \$ 100,000
\end{array}$$
-Refer to the figure Company B.Which of the following best describes the company's performance?

Question

A company reported the following income statement amounts:
 $$\begin{array} { l c c } 
& \text { Year 2 } & \text { Year 1 } \
\text { Sales revenues } & \$ 950,000 & \$ 800,000 \
\text { Operating expenses } & \$ 700,000 & \$ 550,000 \
\text { Income taxes } & \$ 100,000 & \$ 100,000
\end{array}$$
-Refer to the figure Company B.Which of the following best describes the company's performance?

Quizplus · Accepted Answer

Operating profit as a percentage of operating revenues decreased from Year 1 to Year 2, as the increase in operating expenses outpaced the increase in sales revenues.

A Company Reported the Following Income Statement Amounts -Refer to the Figure Company B