Using the following income statements, perform the calculations needed for verti

Question

Using the following income statements, perform the calculations needed for vertical analyses. (Round percentage values to 1 decimal place.)

LOCKEY FENCING CORPORATION Income Statements For the Years Ended December 31 Current Previous Net Sales $200,000 % $135,000 % Cost of Goods Sold 98,000 75,000 Gross Profit 102,000 60,000 Selling, General, and Administrative Expenses 15,000 8,500 Income from Operations 87,000 51,500 Interest Expense 5,000 6,750 Income before Income Tax 82,000 44,750 Income Tax Expense 24,600 13,425 Net Income $57,400 % $31,325 %

Explanation / Answer

Using the following income statements, perform the calculations needed for vertical analyses. (Round percentage values to 1 decimal place.)

LOCKEY FENCING CORPORATION Income Statements For the Years Ended December 31 Current Previous Net Sales $200,000 100 % $135,000 100 % Cost of Goods Sold 98,000 49 75,000 55.5 Gross Profit 102,000 51 60,000 44.4 Selling, General, and Administrative Expenses 15,000 7.5 8,500 6.3 Income from Operations 87,000 43.5 51,500 38.1 Interest Expense 5,000 2.5 6,750 5.0 Income before Income Tax 82,000 41 44,750 33.1 Income Tax Expense 24,600 12.3 13,425 10.0 Net Income $57,400 28.7 % $31,325 23.2 %

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