Question

tanger inc. reported the following selected financial information for the current year: net sales $800,000 gross profit 450,000 net income 250,000 total assets 1,875,000 accounts payable 245,000 total liabilities 1,200,000 if tanger were preparing a vertical analysis, what percentage would be reported for net income on the income statement? answer unselected 10.70% unselected 100% unselected 31.25% unselected 16.67% unselected i don't know yet

Answer 1

In a vertical analysis on Tanger Inc.'s income statement, the percentage for net income relative to net sales is 31.25%.

Step-by-step explanation:

The question concerns the calculation of the percentage for net income on an income statement during a vertical analysis. Vertical analysis is a method of financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities, and equity) in a balance sheet or in a profit and loss statement is represented as a proportion of the total account. To calculate the percentage of net income to net sales on the income statement, we use the formula: (Net Income / Net Sales) x 100. For Tanger Inc., this calculation would be as follows: (250,000 / 800,000) x 100 = 31.25%.