Saira, Inc. has the following income statement (in millions): SAIRA, INC.
Income Statement
For the Year Ended December 31, 2020
$\begin{array}{lr}
\text { Net Sales } & \$ 300 \
\text { Cost of Goods Sold } & 180\
\text { Gross Profit } & 120 \
\text { Operating Expenses } & 45 \
\text { Net Income }&\$75
\end{array}$ Using vertical analysis, what percentage is assigned to Cost of Goods Sold?

Question

Quizplus · Accepted Answer

In vertical analysis, each item on the income statement is expressed as a percentage of net sales. Cost of Goods Sold is $180 million out of Net Sales of $300 million, which is 60% ($180 / $300 = 0.6 or 60%).

Saira, Inc Using Vertical Analysis, What Percentage Is Assigned to Cost of INC