Cochran Corporation, Inc. has the following income statement (in millions): COCHRAN CORPORATION, INC.
Income Statement
For the Year Ended December 31, 2017
$\begin{array}{lr}
\text { Net Sales } & \$ 240 \
\text { Cost of Goods Sold } & 150 \
\text { Gross Profit } & 90 \
\text { Operating Expenses } & \$ 65 \
\text { Net Income } & \$ 25
\end{array}$ Using vertical analysis, what percentage is assigned to net income?

Question

Quizplus · Accepted Answer

Net income is calculated as a percentage of net sales. $ \frac{25}{240} \times 100 = 10.42\% $, which rounds to 10%.

Cochran Corporation, Inc Using Vertical Analysis, What Percentage Is Assigned to Net Income