Perform a vertical analysis of the P&L (FS Company)."Formula: Vertical Analysis % - Each income statement items / Revenues (or Net sales)Fill in each Blank. Round your answers to the nearest tenth percent, i.e. 4.5%. PLEASE SUBMITYOUR ANSWERS IN % and include the % symbol. Do not leave any blank. If the answer is 0, besure to put 0.Cost ofgoods soldGrossprofitNet sales $858,000 Select]OtherexpensesInterestrevenueIncomefromoperationsInterestexpense2018IncomebeforeincometaxesIncometaxexpenseNetincome513,000345,000244,000101,0004,00024,00081,00033,000FS CompanyComparative P&L statementYears Ended December 31, 2018 and 201748,000% of salesSelect J[Select]| Select |[Select][Select][Select][ Select]Select]Select<2017$803,000✓ 509,000✓294,000✓ 237,000<✓ 57,000114,000✓43,000✓ 17,000✓26,000% of sales[Select][ Select][Select]| Select]| Select][ Select]| Select]| Select][Select][Select]<<VV><>>> Measure profitability using Rate of Return on Sales.*Formula: Rate of Return on Sales2017**For each answer round to the nearest tenth percent, i.e. 4.2%, and include the % symbol.Rate of Return on Sales2018[Select]www[Select]Net income / Net sales

Answered: Formula: Vertical Analysis % - Each…

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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Perform a vertical analysis of the P&L (FS Company).
"Formula: Vertical Analysis % - Each income statement items / Revenues (or Net sales)
Fill in each Blank. Round your answers to the nearest tenth percent, i.e. 4.5%. PLEASE SUBMIT
YOUR ANSWERS IN % and include the % symbol. Do not leave any blank. If the answer is 0, be
sure to put 0.
Cost of
goods sold
Gross
profit
Net sales $858,000 Select]
Other
expenses
Interest
revenue
Income
from
operations
Interest
expense
2018
Income
before
income
taxes
Income
tax
expense
Net
income
513,000
345,000
244,000
101,000
4,000
24,000
81,000
33,000
FS Company
Comparative P&L statement
Years Ended December 31, 2018 and 2017
48,000
% of sales
Select J
[Select]
| Select |
[Select]
[Select]
[Select]
[ Select]
Select]
Select
<
2017
$803,000
✓ 509,000
✓294,000
✓ 237,000
<
✓ 57,000
1
14,000
✓43,000
✓ 17,000
✓26,000
% of sales
[Select]
[ Select]
[Select]
| Select]
| Select]
[ Select]
| Select]
| Select]
[Select]
[Select]
<
<
V
V
>
<
>
>
>

Measure profitability using Rate of Return on Sales.
*Formula: Rate of Return on Sales
2017
**For each answer round to the nearest tenth percent, i.e. 4.2%, and include the % symbol.
Rate of Return on Sales
2018
[Select]
www
[Select]
Net income / Net sales

Expert Solution

Step 1: Introduction

Vertical analysis of a Profit and Loss (P&L) account is a financial analysis approach that expresses each line item on the income statement as a percentage of total revenue or sales. This study assists stakeholders such as investors and management in understanding the relative proportion of different cost and income categories in relation to overall revenue, allowing for a more in-depth assessment of the company's financial performance and trends.

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