First, we can see that the company's marketing expenses decreased not

just in peso terms, but also as a percentage of sales. This implies that the

new money invested in marketing was totally effective in driving sales

growth as in prior years. General and administrative expenses also

decrease in percentage this indicates

The vertical analysis also shows that in years one and two, the company's

product cost 30% and 29% of sales, respectively, to produce. In year three,

however, cost of goods sold spikes to 40% of sales. That's driving a

significant decrease in gross profits. This change could be driven by higher

expenses in the production process, or it could represent lower prices. We

can't know for sure without hearing from the company's management, but

with this vertical analysis we can clearly and quickly see that ABC

Company's cost of goods sold and gross profits are a big issue.