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 net income?

Question

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 net income?

Quizplus · Accepted Answer

Net income percentage is calculated by dividing net income by net sales and multiplying by 100. Here, $ \frac{25}{240} \times 100 = 10.42\%$, which rounds to 10%.

Cochran Corporation Inc Using Vertical Analysis What Percentage Is Assigned to Net Income