The following information is provided from Ace Electronics' annual report for the years ended December 31:

-Refer to the Ace Electronics annual report above.Using vertical analysis,$\bold{2012}$ Cost of goods sold would be represented as ________.
A)16%
B)119%
C)125%
D)42%

Question

The following information is provided from Ace Electronics' annual report for the years ended December 31:

-Refer to the Ace Electronics annual report above.Using vertical analysis,$\bold{2012}$ Cost of goods sold would be represented as ________.
A)16% 
B)119% 
C)125% 
D)42%

Quizplus · Accepted Answer

Vertical analysis is a technique that involves analyzing financial statements by expressing each item as a percentage of a key value, usually net sales or total revenues. In this case, we need to express Cost of goods sold as a percentage of net sales for the year 2012.

Cost of goods sold = $3,960,000 
Net sales = $9,400,000

Cost of goods sold as a percentage of net sales:

= Cost of goods sold / Net sales * 100%

= $3,960,000 / $9,400,000 * 100%

= 42.13%

Therefore, the answer is D) 42%.

The Following Information Is Provided from Ace Electronics' Annual Report 2012\bold{2012}2012

The Following Information Is Provided from Ace Electronics' Annual Report $\bold{2012}$