Taylor Company reported the following information for the current year:

What would a vertical analysis report with respect to current year selling and general expenses?

Question

Taylor Company reported the following information for the current year:

What would a vertical analysis report with respect to current year selling and general expenses?

Quizplus · Accepted Answer

A vertical analysis report expresses each item in a financial statement as a percentage of a base amount. For selling and general expenses, the base amount is net sales revenue. Using the provided information, selling and general expenses are $76,828 and net sales revenue is $406,780. Dividing selling and general expenses by net sales revenue and multiplying by 100 gives 18.88%, or approximately 19% of net sales revenue. Therefore, option B is correct. The other options are not supported by the given information.

Taylor Company Reported the Following Information for the Current Year