Saira, Inc. has the following income statement (in millions): $\begin{array}{c}
\text { SAIRA, INC. }\\text { Income Statement }\\text { For the Year Ended December 31, } 2017\
\begin{array}{lr}
\text { Net Sales } & \$ 300 \
\text { Cost of Goods Sold } & 180 \
\text { Gross Profit } & 120 \
\text { Operating Expenses } & 45\
\text { Net Income }&\$75
\end{array}\end{array}$ Using vertical analysis, what percentage is assigned to Net Income?

Question

Quizplus · Accepted Answer

Vertical analysis involves expressing each item in the income statement as a percentage of net sales. Net Income is $75 million, and Net Sales is $300 million. The percentage for Net Income is calculated as ($75 / $300) * 100% = 25%.

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