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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Vertical analysis

Income statement information for Einsworth Corporation follows:

Sales $1,200,000
Cost of goods sold 780,000
Gross profit 420,000

Prepare a vertical analysis of the income statement for Einsworth Corporation.

To determine

Vertical Analysis

Vertical analysis is prepared to analyze the relationship among various financial statements with a particular base amount.

Formula:

Vertical analysis percentage =(Specific itemBaseamount)×100

This analysis is otherwise called as common-size statement.

To prepare: Comparative income statement for the two-year period.

Given info: Income statement for the two year period.

Explanation
Vertical analysis for income statement is performed by setting the net sales as 1...

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