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

-Refer to the EZ Electronics annual report above.Using vertical analysis,2010 net income would be represented as ________.
A)19%
B)100%
C)21%
D)22%

Question

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

-Refer to the EZ Electronics annual report above.Using vertical analysis,2010 net income would be represented as ________.
A)19% 
B)100% 
C)21% 
D)22%

Quizplus · Accepted Answer

To calculate vertical analysis, we divide each item in the income statement by the total revenue of the company. In this case, the net income for 2010 is $2,100,000 and the total revenue is $10,000,000. So, 2010 net income as a percentage of total revenue is:
($2,100,000 ÷ $10,000,000) x 100 = 21%
Therefore, the correct answer is option C.

The Following Information Is Provided from EZ Electronics' Annual Report