To perform a vertical analysis of an income statement,you would divide each line item on the statement by ______.
A)sales
B)net income
C)total assets

Question

Quizplus · Accepted Answer

Vertical analysis involves expressing each line item as a percentage of a certain base figure. In the case of an income statement, the base figure is typically sales or revenue. Therefore, to perform a vertical analysis, each line item on the income statement would be divided by sales.

To Perform a Vertical Analysis of an Income Statement,you Would