Question

Operating data for Sheffield Corp. are presented below.

2020 2019
Sales revenue $720,000 $600,000
Cost of goods sold 501,120 424,200
Selling expenses 111,600 75,000
Administrative expenses 59,040 43,800
Income tax expense 28,800 24,600
Net income 19,440 32,400

Required:
Prepare a schedule showing a vertical analysis for 2020 and 2019.

Answer 1

2020 % 2019 %

Sales revenue 720000 100% 600000 100%

Cost of goods sold 501120 70% 424200 71%

Gross profit 218880 30% 175800 29%

Selling expenses 111600 16% 75000 13%

Administrative expenses 59040 8% 43800 7%

Operating income 48240 7% 57000 10%

Income tax expense 28800 4% 24600 4%

Net income 19440 3% 32400 5%