Mahbub runs a recruitment agency. The agency’s income is earned in the form of commissions from clients who pay a percentage of the first year’s salary of new employees recruited by the agency. In the...

Mahbub runs a recruitment agency. The agency’s income is earned in the form of commissions from clients who pay a percentage of the first year’s salary of new employees recruited by the agency. In the year to 31 December 2012 the total of commission income earned was £115 900. Mahbub is very pleased with this record level of commission; it is 25% higher than total commissions in the previous year.

Expenses, however, also increased. Premises costs totalled £16 506, staff costs were £29 900 and administration costs were £15 981. In the year to 31 December 2011 the equivalent expenses totals were:

From the information given above, prepare Mahbub’s income statement for both 2012 and 2011. Calculate the percentage increase or decrease in net profit.