The vertical analysis statement of Nobell Inc.is as shown below:
-Thee figure 16.5% shown for net income in 2015 signifies that ________.
A)net income is 16.5% of net sales revenues
B)net income is increased by 16.5% over the previous year
C)net income is 16.5% of gross profit
D)net income is equal to 16.5 times of the income before income tax

Question

The vertical analysis statement of Nobell Inc.is as shown below:  
-Thee figure 16.5% shown for net income in 2015 signifies that ________.
A)net income is 16.5% of net sales revenues 
B)net income is increased by 16.5% over the previous year 
C)net income is 16.5% of gross profit 
D)net income is equal to 16.5 times of the income before income tax

Quizplus · Accepted Answer

The figure 16.5% for net income in the vertical analysis statement indicates that net income is 16.5% of net sales revenues. This is because the vertical analysis statement expresses each line item as a percentage of total net sales revenues, and therefore the 16.5% figure represents the proportion of net income to total net sales revenues.

The Vertical Analysis Statement of Nobell Inc