COMPANY AINCOME STATEMENT: VERTICAL ANALYSIS COMPANY ACOMPANY BSALES REVENUE100%100%LESS: COST OF GOOD SOLD62.40%71.20%GROSS PROFIT37.60%28.80%LESS: OPERATING EXPENSES18.20%16.10%OPERATING INCOME19.40%12.70%LESS: INTEREST EXPENSE1.98%1.60%INCOME BEFORE INCOME TAXES17.42%11.10%LESS: INCOME TAX EXPENSE3.40%2.98%NET INCOME14.02%8.12%using vertical analysis, assess the financial performance of Company A & B with comparison.

Vertical Analysis is a form of financial analysis where the line items on a company’s income…

Answered: COMPANY A INCOME STATEMENT: VERTICAL…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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COMPANY A
INCOME STATEMENT: VERTICAL ANALYSIS
	COMPANY A	COMPANY B
SALES REVENUE	100%	100%
LESS: COST OF GOOD SOLD	62.40%	71.20%
GROSS PROFIT	37.60%	28.80%
LESS: OPERATING EXPENSES	18.20%	16.10%
OPERATING INCOME	19.40%	12.70%
LESS: INTEREST EXPENSE	1.98%	1.60%
INCOME BEFORE INCOME TAXES	17.42%	11.10%
LESS: INCOME TAX EXPENSE	3.40%	2.98%
NET INCOME	14.02%	8.12%

using vertical analysis, assess the financial performance of Company A & B with comparison.

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