For 2021, Hamilton Company had Sales of $5,700,000 and Cost of Goods Sold of $3,600,000. For 2020, Hamilton Company had Sales of $4,800,000 and Cost of Goods Sold of $2,900,000. a. What was the Cost of Goods Sold as a percent of Sales for 2021? b. What was the Cost of Goods Sold as a percent of Sales for 2020? c. Did Hamilton show improvement from 2020 to 2021?
For 2021, Hamilton Company had Sales of $5,700,000 and Cost of Goods Sold of $3,600,000.
For 2020, Hamilton Company had Sales of $4,800,000 and Cost of Goods Sold of $2,900,000.
a. What was the Cost of Goods Sold as a percent of Sales for 2021?
b. What was the Cost of Goods Sold as a percent of Sales for 2020?
c. Did Hamilton show improvement from 2020 to 2021?
d. Is this an example of horizontal or vertical analysis?
Vertical analysis is one of the form of financial statement analysis,under which each item is being analysed as a percentage of total. Under vertical analysis of income statement, each item is being analysed as a percentage of sales. If other revenues are increasing, then it is a positive sign and if costs are increasing as compared to previous year, then it is a negative sign.
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