Identify the correct option for the given statement.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 12, Problem 1SSQ

To determine

Identify the correct option for the given statement.

Expert Solution & Answer

Answer to Problem 1SSQ

b. Sales.

Explanation of Solution

Vertical analysis:

The comparison of an item of a financial statement against the total amount of the same financial statement, to determine the relation between the two items, is referred to as vertical analysis.

The income statement percentage is expressed from the percentage of sales. Because the vertical analysis of the income statement is prepared by fixing the net sales as base with 100 percentages, and from this net sale, each of the other item’s percentage is computed. Hence, in the vertical analysis of income statement, the net sales are assumed as a base amount.

Use the below formula to determine the percentage amount of each item in the income statement:

Income statement item percentage=Each item on Income statementNet sales×100

From the above explanation it is clear that option “a, c and d” are incorrect, only option “b” is correct.

Conclusion

Hence, the correct option is option b.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Ans plz

What are annual credit sales ? General accounting

The next dividend payment by Skippy Inc. will be $3.45. The dividends are anticipated to maintain a growth rate of 4.2% forever. If the stock currently sells for $37.95 per share, what is the required rate of return? Comprehensive Holdings just paid a dividend of $2.95 per share on its stock. The dividends are expected to grow at a constant rate of 4.8% forever. If investors require a return of 12% on the stock, what is the current price? What will be the price in 3 years? In 7 years? Citibank expects to pay a dividend of $2 per share on its common stock at the end of this year. The growth rate of the dividend is 8% for the next 2 years. After that, the dividends are expected to grow at a constant growth rate of 5% per year forever. The required rate of return on the company’s stock is 11%. What is the price of Citibank stock today? A firm pays a current dividend of $3, which is expected to grow at a rate of 4% indefinitely. If the current value of the firm’s shares is $53,…

Answer 2

Question

Chapter 12, Problem 1SSQ

To determine

Identify the correct option for the given statement.

Expert Solution & Answer

Answer to Problem 1SSQ

b. Sales.

Explanation of Solution

Vertical analysis:

The comparison of an item of a financial statement against the total amount of the same financial statement, to determine the relation between the two items, is referred to as vertical analysis.

The income statement percentage is expressed from the percentage of sales. Because the vertical analysis of the income statement is prepared by fixing the net sales as base with 100 percentages, and from this net sale, each of the other item’s percentage is computed. Hence, in the vertical analysis of income statement, the net sales are assumed as a base amount.

Use the below formula to determine the percentage amount of each item in the income statement:

Income statement item percentage=Each item on Income statementNet sales×100

From the above explanation it is clear that option “a, c and d” are incorrect, only option “b” is correct.

Conclusion

Hence, the correct option is option b.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 12, Problem 1SSQ

To determine

Identify the correct option for the given statement.

Expert Solution & Answer

Answer to Problem 1SSQ

b. Sales.

Explanation of Solution

Vertical analysis:

The comparison of an item of a financial statement against the total amount of the same financial statement, to determine the relation between the two items, is referred to as vertical analysis.

The income statement percentage is expressed from the percentage of sales. Because the vertical analysis of the income statement is prepared by fixing the net sales as base with 100 percentages, and from this net sale, each of the other item’s percentage is computed. Hence, in the vertical analysis of income statement, the net sales are assumed as a base amount.

Use the below formula to determine the percentage amount of each item in the income statement:

Income statement item percentage=Each item on Income statementNet sales×100

From the above explanation it is clear that option “a, c and d” are incorrect, only option “b” is correct.

Conclusion

Hence, the correct option is option b.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 12, Problem 1SSQ

To determine

Identify the correct option for the given statement.

Expert Solution & Answer

Answer to Problem 1SSQ

b. Sales.

Explanation of Solution

Vertical analysis:

The comparison of an item of a financial statement against the total amount of the same financial statement, to determine the relation between the two items, is referred to as vertical analysis.

The income statement percentage is expressed from the percentage of sales. Because the vertical analysis of the income statement is prepared by fixing the net sales as base with 100 percentages, and from this net sale, each of the other item’s percentage is computed. Hence, in the vertical analysis of income statement, the net sales are assumed as a base amount.

Use the below formula to determine the percentage amount of each item in the income statement:

Income statement item percentage=Each item on Income statementNet sales×100

From the above explanation it is clear that option “a, c and d” are incorrect, only option “b” is correct.

Conclusion

Hence, the correct option is option b.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 12, Problem 1SSQ

To determine

Identify the correct option for the given statement.

Expert Solution & Answer

Answer to Problem 1SSQ

b. Sales.

Explanation of Solution

Vertical analysis:

The comparison of an item of a financial statement against the total amount of the same financial statement, to determine the relation between the two items, is referred to as vertical analysis.

The income statement percentage is expressed from the percentage of sales. Because the vertical analysis of the income statement is prepared by fixing the net sales as base with 100 percentages, and from this net sale, each of the other item’s percentage is computed. Hence, in the vertical analysis of income statement, the net sales are assumed as a base amount.

Use the below formula to determine the percentage amount of each item in the income statement:

Income statement item percentage=Each item on Income statementNet sales×100

From the above explanation it is clear that option “a, c and d” are incorrect, only option “b” is correct.

Conclusion

Hence, the correct option is option b.

Answer 6

Chapter 12, Problem 1SSQ

To determine

Identify the correct option for the given statement.

Expert Solution & Answer

Answer to Problem 1SSQ

b. Sales.

Explanation of Solution

Vertical analysis:

The comparison of an item of a financial statement against the total amount of the same financial statement, to determine the relation between the two items, is referred to as vertical analysis.

The income statement percentage is expressed from the percentage of sales. Because the vertical analysis of the income statement is prepared by fixing the net sales as base with 100 percentages, and from this net sale, each of the other item’s percentage is computed. Hence, in the vertical analysis of income statement, the net sales are assumed as a base amount.

Use the below formula to determine the percentage amount of each item in the income statement:

Income statement item percentage=Each item on Income statementNet sales×100

From the above explanation it is clear that option “a, c and d” are incorrect, only option “b” is correct.

Conclusion

Hence, the correct option is option b.

Answer 7

Chapter 12, Problem 1SSQ

To determine

Identify the correct option for the given statement.

Answer 8

Expert Solution & Answer

Answer to Problem 1SSQ

b. Sales.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Vertical analysis:

The comparison of an item of a financial statement against the total amount of the same financial statement, to determine the relation between the two items, is referred to as vertical analysis.

The income statement percentage is expressed from the percentage of sales. Because the vertical analysis of the income statement is prepared by fixing the net sales as base with 100 percentages, and from this net sale, each of the other item’s percentage is computed. Hence, in the vertical analysis of income statement, the net sales are assumed as a base amount.

Use the below formula to determine the percentage amount of each item in the income statement:

Income statement item percentage=Each item on Income statementNet sales×100

From the above explanation it is clear that option “a, c and d” are incorrect, only option “b” is correct.