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 Cost of Goods Sold?

Question

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 Cost of Goods Sold?

Quizplus · Accepted Answer

Vertical analysis involves expressing each item on the income statement as a percentage of net sales. Cost of Goods Sold is typically shown as a percentage of net sales, and in this case, it is 60% (or 0.60 when expressed as a decimal).

Saira Inc Has the Following Income Statement (In Millions) Using Vertical Analysis What Percentage Is Assigned to Cost of {SAIRA