The following income statement information is for Sadie Company:Sales$175,000Cost of goods sold115,000Gross profit$ 60,000Using vertical analysis of the income statement for Sadie Company, determine the gross profit margin.
A) 100%
B) 66.5%
C) 34.3%
D) 29.4%

Question

The following income statement information is for Sadie Company:Sales$175,000Cost of goods sold115,000Gross profit$ 60,000​Using vertical analysis of the income statement for Sadie Company, determine the gross profit margin.
A) 100%
B) 66.5%
C) 34.3%
D) 29.4%

Quizplus · Accepted Answer

Gross profit margin is calculated as (Gross Profit / Sales) * 100. For Sadie Company, this is ($60,000 / $175,000) * 100 = 34.3%.

The Following Income Statement Information Is for Sadie Company:Sales$175,000Cost of Goods