For vertical analysis purposes, the base item on the Income Statement is:
A)net income.
B)net sales.
C)total expenses.
D)gross profit.

Question

Quizplus · Accepted Answer

In vertical analysis, the base item is usually the total revenue or net sales, as this is the starting point for calculating the percentage of each expense item in relation to net sales. Therefore, the correct answer is B - net sales.

For Vertical Analysis Purposes, the Base Item on the Income