hat does the vertical analysis reveal for ABC corporation in terms of Income Statement

Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.17E: Profitability metrics The following selected data were taken from the financial statements of The...
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What does the vertical analysis reveal for ABC corporation in terms of Income Statement

COMMON-SIZE INCOME STATEMENT
FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2025
Common Size
Percentage
2025
2024
2025
2024
Sales
3,007,887
2,732,712
100.00
100.00
Less: Cost of good sold
2,208,520
1,964,865
73.42
71.90
Gross Profit
799,367
767,847
26.58
28.10
Less: Selling Expenses
Administrative Expenses
372,000
345,000
12.37
12.62
213,000
207,000
579,000
6.88
7.79
Total Operating Expenses
558,000
19.25
20.42
Operating Income
Less: Interest Expense
220,367
209,847
7.33
7.68
41,860
43,905
1.39
1.61
Net Income before taxes
178,507
165,942
5.93
6.07
Less: Income Tax
62,477
58,080
2.08
2.13
Net Income after taxes
116,030
107,862
3.86
3.95
Transcribed Image Text:COMMON-SIZE INCOME STATEMENT FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2025 Common Size Percentage 2025 2024 2025 2024 Sales 3,007,887 2,732,712 100.00 100.00 Less: Cost of good sold 2,208,520 1,964,865 73.42 71.90 Gross Profit 799,367 767,847 26.58 28.10 Less: Selling Expenses Administrative Expenses 372,000 345,000 12.37 12.62 213,000 207,000 579,000 6.88 7.79 Total Operating Expenses 558,000 19.25 20.42 Operating Income Less: Interest Expense 220,367 209,847 7.33 7.68 41,860 43,905 1.39 1.61 Net Income before taxes 178,507 165,942 5.93 6.07 Less: Income Tax 62,477 58,080 2.08 2.13 Net Income after taxes 116,030 107,862 3.86 3.95
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