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 COPORATION; Income Statements; For the years ended december 31. Current Previous: Net Sales $105,000 current, $78,000 Previous; Cost of Goods Sold 60,000 Current 46,500 Previous; Gross Profit 45,000 Current, 31,500 Previous; Selling, General, and Administrative Expense 9,300 current, 4,700 Previous; Income from Operations 35,700 Current, 26,800 Previous; Interest Expense 3,100 Current, 3,900 Previous; Income before Income Tax 32,600 Current, 22,900 Previous; Income Tax Expense 9,780 Current, 6,870 Previous; Net Income $22,820 Current, $16,030 Previous

Explanation / Answer

Vertical Analysis Current Previous Changes in $ Changes in % Net Sales       1,05,000                78,000             27,000 34.6% Cost of goods sold          60,000                46,500             13,500 29.0% Gross profit          45,000                31,500             13,500 42.9% Selling, General & Administrative expenses             9,300                  4,700               4,600 97.9% Income from operations          35,700                26,800               8,900 33.2% Interest expenses             3,100                  3,900                 -800 -20.5% Income before income tax          32,600                22,900               9,700 42.4% Income tax expense             9,780                  6,870               2,910 42.4% Net income          22,820                16,030               6,790 42.4%

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