In vertical analysis the base amount for each income statement item is
A) gross profit.
B) net income.
C) net sales.
D) sales.

Question

Quizplus · Accepted Answer

In vertical analysis, the base amount for each income statement item is usually net sales. This allows for the calculation of each line item as a percentage of sales, providing insight into how much of each dollar of sales is being allocated to different expenses and income categories.

In Vertical Analysis the Base Amount for Each Income Statement