Final answer:
In vertical analysis of an income statement, the base amount is net sales revenue, which is used to understand the proportion of each account relative to total revenue.
Step-by-step explanation:
When performing vertical analysis of an income statement, the base amount is net sales revenue. Vertical analysis is a method where each entry for each of the three major categories of accounts in the income statement (revenues, expenses, and profits) is represented as a proportion of total revenue.
This analysis is useful for understanding the relative significance of each account in generating the total revenue of a business. Importantly, vertical analysis makes it easier to compare different companies of different sizes, as the figures are represented in percentage terms relative to a common base, which in this case, is the total revenue.