Pad 12:28 PM * 98% v2.cengagenow.com Cengage CengageNOWu2.. Horizontal Analysis.

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Pad 12:28 PM * 98% v2.cengagenow.com Cengage CengageNOWu2.. Horizontal Analysis... Income Statement The Following Infor... HWK CH 14 Vertical Analysis Income statement information for Einsworth Corporation follows: Sales Cost of goods sold Gross profit Prepare a vertical analysis of the income statement for Einsworth Corporation. If required, round percentage $586,000 193,380 392,620 answers to the nearest whole number Einsworth Corporation Vertical Analysis of the Income Statement Amount Percentage Sales $586,000 Cost of goods sold 193,380 $392,620 Gross profit Check My Work 2 more Check My Work uses remaining Previous Next ssignment Score: 0.0% All work saved Save and Exit Submit Assignment for Grading

Explanation / Answer

Vertical analysis of income statement could be done taking into consideration sales as 100%. All the other accounts should be expressed as percentage, based on sales figure.

Vertical analysis

$

Percentage

Sales

586,000

100%

Cost of goods sold

193,380

33%

Gross profit (Sales – Cost of goods sold)

392,620

67%

Workings: Cost of goods sold = (193,380 / 586,000) × 100

                                                = 33%

$

Percentage

Sales

586,000

100%

Cost of goods sold

193,380

33%

Gross profit (Sales – Cost of goods sold)

392,620

67%

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