Cochran Corporation Inc.has the following income statement (in millions): COCHRAN CORPORATION, INC.
Income Statement
For the Year Ended December 31, 2021
$\begin{array}{lr}
\text { Net Sales } & \$ 240 \
\text { Cost of Goods Sold } & 150 \
\text { Gross Profit } & 90 \
\text { Operating Expenses } & 65 \
\text { Net Income } & \$ 25
\end{array}$ Using vertical analysis what percentage is assigned to cost of goods sold?

Question

Quizplus · Accepted Answer

Vertical analysis involves expressing each item in the income statement as a percentage of net sales. Cost of Goods Sold is $150, and Net Sales is $240. The percentage is calculated as ($150 / $240) * 100% = 62.5%, which rounds to 63%.

Cochran Corporation Inc Using Vertical Analysis What Percentage Is Assigned to Cost of CORPORATION