Blanco, Inc.has the following income statement (in millions):
$\begin{array}{c}
\text { BLANCO, INC.}\
\text { Income Statement}\
\text { For the Year Ended December 31, 2011}\
\begin{array}{lr}
\text { Net Sales } & \$ 200 \
\text { Cost of Goods Sold } & \underline{120} \
\text { Gross Profit } & 80 \
\text { Operating Expenses } & \underline{4 4} \
\text { Net Income } &\underline{\underline{ \$ 36}}
\end{array}\end{array}$

Using vertical analysis, what percentage is assigned to Net Income?

Question

Blanco, Inc.has the following income statement (in millions): 
$\begin{array}{c}
 \text { BLANCO, INC.}\
\text { Income Statement}\
\text { For the Year Ended December 31, 2011}\
\begin{array}{lr}
\text { Net Sales } & \$ 200 \
\text { Cost of Goods Sold } & \underline{120} \
\text { Gross Profit } & 80 \
\text { Operating Expenses } & \underline{4 4} \
 \text { Net Income } &\underline{\underline{ \$ 36}}
\end{array}\end{array}$

Using vertical analysis, what percentage is assigned to Net Income?

Quizplus · Accepted Answer

Vertical analysis involves expressing each item in the income statement as a percentage of net sales. Net Income is $36 million, and Net Sales is $200 million. The percentage is calculated as ($36/$200) * 100% = 18%.

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