Chapter 15, Problem 9CR

### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

Chapter
Section

### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# In vertical analysis of an income statement, each figure on the statement is expressed as a percent of _____ _____. (15-5)

To determine

To fill: The blanks provided for the statement, “In a vertical analysis of an income statement, each figure on the statement is expressed as a percent of ________.”

Explanation

Consider the given information is based on the vertical analysis.

Income statement specifies the information in regard to the profit earned or loss occurred, during a period of time. Even, it enables an organization to compare information about one or more periods. It is also known as a profit or loss account.

In a vertical balance sheet, every item that is displayed is the relative size of the different accounts. It is used to describe each item that is listed in the balance sheet is a percentage of total assets. It is expressed as a percent of net sales (net sales=100%).

The net sales is computed by adding gross margin by cost of goods sold.

Net sales=Gross margin+Cost of goods sold

For example, consider gross margin is $321,100 and cost of goods sold is$244,600

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