**Exercise 12-2 (Algo) Prepare Vertical Analysis (LO12-1)**The income statements for Federer Sports Apparel for 2025 and 2024 are presented below.**Required:**Prepare a vertical analysis of the data for 2025 and 2024. *(Round your percentage answers to 1 decimal place.)*---**FEDERER SPORTS APPAREL****Income Statement****For the Years Ended December 31**| | **2025** | | **2024** | ||---------------------|-------------------|----------|-----------------|----------|| | **Amount** | **%** | **Amount** | **%** || **Net sales** | $18,200,000 | | $14,900,000 | || **Cost of goods sold** | 13,431,600 | | 6,645,400 | || **Gross profit** | 4,768,400 | | 8,254,600 | || **Operating expenses** | 1,437,800 | | 1,057,900 | || **Depreciation expense** | 855,400 | | 879,100 | || **Inventory write-down** | 91,000 | | 0 | || **Loss (litigation)** | 1,346,800 | | 268,200 | || **Income before tax** | 1,037,400 | | 6,049,400 | || **Income tax expense** | 327,600 | | 1,832,700 | || **Net income** | $709,800 | | $4,216,700 | |---### Explanation of Vertical AnalysisVertical analysis involves expressing each item on the financial statement as a percentage of a base figure. In income statements, sales are typically used as the base. This analysis allows for easier comparison over different periods by highlighting the relative size of each expense category or profit margin, facilitating the assessment of financial health and operational efficiency across different years.

VERTICAL ANALYSIS OF BALANCE SHEETVertical analysis is a proportional analysis of financial statements. Vertical Analysis is a form of financial statement analysis where the line items on a company’s income statement or balance sheet is expressed as a percentage of a base figure.In Vertical Analysis of balance sheet base figure is always Total Assets or Total Liabilities.In Vertical Analysis of Income Statement base figure is always Total Revenue or Total Sales.Vertical Analysis formula for Balance sheet= (Balance Sheet Item ÷ Total Assets) * 100Vertical Analysis formula for Income Statement= (Income Statement Item ÷ Total Sales Revenue) * 100 FEDERER SPORTS APPERALIncome Statement For the Year Ended December 31 20252024Amount%Amount%A[(A÷Net Sales)*100]B[(B÷ Net Sales)*100]Net Sales$18,200,000100%$14,900,000100%Cost of Goods Sold$13,431,60073.8%$6,645,40044.6%Gross Profit$4,768,40026.2%$8,254,60055.4%Operating Expenses$1,437,8007.9%$1,057,9007.1%Depreciation Expense$855,4004.7%$879,1005.9%Inventory Write Down$91,0000.5%0NALoss (Litigation)$1,346,8007.4%$268,2001.8%Income Before Tax$1,037,4005.7%$6,049,40040.6%Income Tax Expense$327,6001.8%$1,832,70012.3%Net Income $709,8003.9%$4,216,70028.3%REQUIREMENT # :— FINAL ANSWERRequirement #1 :— FEDERER SPORTS APPERALIncome Statement For the Year Ended December 31 20252024Amount%Amount%Net Sales$18,200,000100%$14,900,000100%Cost of Goods Sold$13,431,60073.8%$6,645,40044.6%Gross Profit$4,768,40026.2%$8,254,60055.4%Operating Expenses$1,437,8007.9%$1,057,9007.1%Depreciation Expense$855,4004.7%$879,1005.9%Inventory Write Down$91,0000.5%0NALoss (Litigation)$1,346,8007.4%$268,2001.8%Income Before Tax$1,037,4005.7%$6,049,40040.6%Income Tax Expense$327,6001.8%$1,832,70012.3%Net Income $709,8003.9%$4,216,70028.3%

Business

Accounting

Exercise 12-2 (Algo) Prepare vertical analysis (LO12-1) The income statements for Federer Sports Apparel for 2025 and 2024 are presented below. Required: Prepare a vertical analysis of the data for 2025 and 2024. (Round your percentage answers to 1 decimal place.) Net sales Cost of goods sold Gross profit Operating expenses Depreciation expense Inventory write-down Loss (litigation) Income before tax Income tax expense Net income FEDERER SPORTS APPAREL Income Statement For the Years Ended December 31 2025 $ $ Amount 18,200,000 13,431,600 4,768,400 1,437,800 855,400 91,000 1,346,800 1,037,400 327,600 709,800 % $ $ Amount 2024 14,900,000 6,645,400 8,254,600 1,057,900 879,100 0 268,200 6,049,400 1,832,700 4,216,700 %

Exercise 12-2 (Algo) Prepare vertical analysis (LO12-1) The income statements for Federer Sports Apparel for 2025 and 2024 are presented below. Required: Prepare a vertical analysis of the data for 2025 and 2024. (Round your percentage answers to 1 decimal place.) Net sales Cost of goods sold Gross profit Operating expenses Depreciation expense Inventory write-down Loss (litigation) Income before tax Income tax expense Net income FEDERER SPORTS APPAREL Income Statement For the Years Ended December 31 2025 $ $ Amount 18,200,000 13,431,600 4,768,400 1,437,800 855,400 91,000 1,346,800 1,037,400 327,600 709,800 % $ $ Amount 2024 14,900,000 6,645,400 8,254,600 1,057,900 879,100 0 268,200 6,049,400 1,832,700 4,216,700 %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Please assist Calculate the percentage increase/decrease in cost of sales from 2018 to 2019.
Solve this income statement by vertical analysis :
What is the percent change for cost of goods sold?
Haresh
Please answer 16-18
12
using the report given,provide and comment on the following: You meed to analyse the items under the consolidated statement of profit or loss both years 2019 and 2020. Provide an analysis using this part.
Help me pls
please answer do not image format
Comparative Income Statements Consider the following income statement data from the Mono Company: Sales revenue Cost of goods sold Selling expenses Administrative expenses Income tax expense 2019 2018 $600,000 $450,000 336,000 279,000 105,000 99,000 60,000 50,000 4,000 3,000 Prepare a contparative income statement, showing increases, and decreases in dollars and in percentages. Note: Round "Percent Change" answers to one decimal place (ex: 0.2345 = 23.5%). Sales Revenue Cost of Goods Sold MONO COMPANY Comparative Income Statements ♦ Selling Expenses Administrative Expenses Total Income before Income Taxes ◆ → $ $ 2019 0 $ 0 0 0 0 oooo 0 0 $ 2018 Increase (Decrease) 0 $ 0 0 0 0 0 0 0 0 $ 0 0 0 0 0 0 0 0 0 Percent Change 0% 0% 0% 0% 0% 0% 0% 0% 0 %
Please help
Use the given statement of comprehensive income below in answering the question. DEF Company, Income Statement 2021 2020 Sales P10,200.00 P9,600.00 Cost of Goods Sold P3,000.00 P2,600.00 Gross Profit P7,200.00 P7,000.00 Operating Expenses P2,400.00 P2,200.00 Operating Profit P4,800.00 P4,800.00 Interest Expense P900.00 P800.00 Earnings before tax P3,900.00 P4,000.00 Income Tax P1,560.00 P1,600.00 Net Profit P2,340.00 P2,400.00 What is the percent change of net profit? А -3.5% В 12.5% C) -12.5% -2.5%