When performing vertical analysis, the base amount for administrative expenses is generally
A) administrative expenses in a previous year.
B) net sales.
C) gross profit.
D) fixed assets.

Question

Quizplus · Accepted Answer

When performing vertical analysis, the base amount is generally the net sales. This allows for a comparison of each category's percentage of the total sales, providing insight into their relative importance or contribution to the profitability of the company.

When Performing Vertical Analysis, the Base Amount for Administrative Expenses