Question

Skysong, Inc. has the following Income Statement (in millions): SKYSONG, INC. Income Statement For the Year Ended December 31, 2023 Net Sales $400 Cost of Goods Sold 288 Gross Profit 112 Operating Expenses 44 Net Income $ 68 Using vertical analysis, what percentage is assigned to gross profit

Answer 1

Answer:

28%

Explanation:

To complete the vertical analysis for this income statement, we list the items, and assign each item a percentage of the base, the base being Net Sales.

Vertical Analysis - Income Statement for year ended in December 31, 2023.

Item                              Value                    Percentage

Net Sales                     $400                     100%

Cost of Goods Sold    $288                      72%

Gross Profit                $112                        28%

Operating Expenses  $44                         11%

Net Income                 $68                         17%

As we can see above, the percentage assigned to gross profit is 28%.