Taylor Company reported the following information for the current year: What would a vertical analysis report with respect to the relationship between current year net sales revenue and COGS?

Question

Taylor Company reported the following information for the current year:  What would a vertical analysis report with respect to the relationship between current year net sales revenue and COGS?

Quizplus · Accepted Answer

A vertical analysis report shows the proportion of each item on a financial statement relative to a certain base, which is usually net sales revenue. In this case, the relationship between current year net sales revenue and COGS is given by dividing COGS by net sales revenue and expressing the result as a percentage. Therefore, COGS was 60.00% of net sales revenue in the current year. The other answer choices are not related to the question or do not make sense based on the provided information.

Taylor Company Reported the Following Information for the Current Year