Question

Skysong, Inc. has the following Income Statement (in millions): SKYSONG, INC. Income Statement For the Year Ended December 31, 2023 Net Sales $400 Cost of Goods Sold 288 Gross Profit 112 Operating Expenses 44 Net Income $ 68 Using vertical analysis, what percentage is assigned to gross profit

Answer 1

28%

Step-by-step explanation:

To complete the vertical analysis for this income statement, we list the items, and assign each item a percentage of the base, the base being Net Sales.

Vertical Analysis - Income Statement for year ended in December 31, 2023.

Item Value Percentage

Net Sales $400 100%

Cost of Goods Sold $288 72%

Gross Profit $112 28%

Operating Expenses $44 11%

Net Income $68 17%

As we can see above, the percentage assigned to gross profit is 28%.