For vertical analysis purposes, the base item on an income statement is:
A) net income.
B) net sales.
C) total expenses.
D) total sales.

Question

Quizplus · Accepted Answer

For vertical analysis of an income statement, the base item is typically net sales (or total sales), against which all other items are compared as a percentage. This helps in understanding the relative size of each item in relation to net sales, providing insights into the cost structure and profitability of the business.

For Vertical Analysis Purposes, the Base Item on an Income