Blanco, Inc. has the following income statement (in millions): Using vertical analysis, what percentage is assigned to Cost of Goods Sold?

Question

Blanco, Inc. has the following income statement (in millions):  Using vertical analysis, what percentage is assigned to Cost of Goods Sold?

Quizplus · Accepted Answer

To calculate the percentage assigned to Cost of Goods Sold using vertical analysis, we need to divide the Cost of Goods Sold by the Total Revenue and then multiply by 100.

Cost of Goods Sold = $3,000 million 
Total Revenue = $5,000 million

Therefore,

Percentage assigned to Cost of Goods Sold = (Cost of Goods Sold / Total Revenue) x 100 
= ($3,000 / $5,000) x 100 
= 60%

Hence, the correct answer is option A.