P10-4A. Prepare horizontal and vertical analysis. (LO 2)Given the followings inc

P10-4A. Prepare horizontal and vertical analysis. (LO 2)Given the followings income statements:Year ended December 31 (in thousands)200920082007Net sales$5003837$4934430$4881103Cost of goods sold275532328044592784392Gross profit224851421299712096711Selling general and administrativeexpenses167344915983331573510Operating income575065531638523201Interest expense61 1 6 871 97180837Interest and net investmentexpense (income)(5761)(6482)(8278)Other expense-net295402604623355Income before income taxes490118440103427277Income taxes185258167239166663Net income$303860$272864$260614 Requireda. For each of the years shown prepare a vertical analysis using sales as the base.Write a paragraph explaining what the analysis shows.b. Using 2007 as the base year prepare a horizontal analysis for sales and cost of goods sold. What information does this analysis give you?