Question

In which of the following is net sales are represented by 100%?

a) a vertical analysis of a balance sheet
b) a horizontal analysis of an income statement
c) a vertical analysis of an income statement
d) a horizontal analysis of a balance sheet

Answer 1

Net sales are represented by 100% in a vertical analysis of an income statement.

Step-by-step explanation:

Net sales are represented by 100% in a vertical analysis of an income statement.

A vertical analysis compares each item on the income statement to the net sales figure, which is considered 100%.

This analysis helps to determine the proportion of each expense or income item in relation to net sales.