Question

Operating data for Bramble Corp. are presented below.

2020 2019
Sales revenue $730,000 $650,000
Cost of goods sold 480,340 473,850
Selling expenses 105,850 84,500
Administrative expenses 50,370 52,000
Income tax expense 29,930 26,650
Net income 63,510 13,000
Prepare a schedule showing a vertical analysis for 2020 and 2019.
(Round percentages to 1 decimal place, e.g. 12.1%.)
BRAMBLE CORP. Condensed Income Statement For the Years Ended December 31 2020 2019 Amount Percent Amount Percent
Sales $730,000 % $650,000 %
Cost of goods sold 480,340 % 473,850 %
Gross profit 249,660 % 176,150 %
Selling expenses 105,850 % 84,500 %
Administrative expenses 50,370 % 52,000 %
Total operating expenses 156,220 % 136,500 %
Income before income taxes 93,440 % 39,650 %
Income tax expense 29,930 % 26,650 %
Net income $ 63,510 % $ 13,000 %

Answer 1

Step-by-step explanation:

Vertical analysis of financial statement entails the expression of each line of the financial statement as a percentage of a base figure for analysis and evaluation purpose.

In this case , the sales revenue is used as the base figure

Vertical analysis of Bramble corp . Income statement for 2020 / 2019

Item 2020 % 2019 %

Sales revenue 730,000 100 650,000 100

Cost of goods 480,340 65.8 473,850 72.9

Gross profit 249,660 34.2 176,150 27.1

Selling expenses 105,850 14.5 84,500 13.0

Admin Expenses 50,370 6.9 52,000 8

Operating Expenses 156,220 21.4 136,500 21

Income before tax 93,440 12.8 39,650 6.1

Income tax Expenses 29,930 4.1 26,650 4.1

Net Income 63,510 8.7 13,000 2