Vertical Analysis of Income Statement The cost of goods sold in 2004 has decreased as a percentage of sales to 49.21%, from 53.43% in 2003. From this stat you can derive that every dollar of revenue costs $0.49 to generate. Has a result, the Gross Margin in 2004 is 50.8%, up from the 46.57% in 2003. The gross margin and sales revenues for Serious Spokes is second in the industry to BMG Pro. Nevertheless, Serious Spokes is the industries front runner in earnings per share and profit after tax. Selling and distribution expenses represent 21% of total sales, down from 25% in 2003.Administration and financial expenses represent 2.36% of total sales, once again down from 2.86% in 2003. Product advertising increased by 21.33%. Another significant change was in Product PR which decreased 87.80% from 2003. While Finished goods warehousing increased 217.43%. The changes in expenses have proven successful as the companies total sales have increased. Total Net Income has increased 52.35% from 2003. The decrease in both total expenses and cost of goods sold, along with the increase in sales explains the dramatic increase in profitability.