World Consulting has the following data available: $$\begin{array} { l r }
\text { Sales } & \$ 2000000 \
\text { Selling expenses } & 200000 \
\text { Profit } & 400000
\end{array}$$ Using vertical analysis express selling expenses as a percentage of the base amount.

Question

World Consulting has the following data available: $$\begin{array} { l r } 
\text { Sales } & \$ 2000000 \
\text { Selling expenses } & 200000 \
\text { Profit } & 400000
\end{array}$$ Using vertical analysis express selling expenses as a percentage of the base amount.

Quizplus · Accepted Answer

Vertical analysis involves expressing each item in a financial statement as a percentage of a base amount. Here, selling expenses are expressed as a percentage of sales: $ \frac{200000}{2000000} \times 100 = 10\% $.

World Consulting Has the Following Data Available Sales $2000000 Selling expenses 200000 Profit 400000\begin{array} { l r } \text { Sales } & \$ 2000000 \\\text { Selling expenses } & 200000 \\\text { Profit } & 400000\end{array} Sales Selling expenses Profit ​$2000000200000400000​

World Consulting Has the Following Data Available $\begin{array} { l r } \text { Sales } & \$ 2000000 \\\text { Selling expenses } & 200000 \\\text { Profit } & 400000\end{array}$