In a vertical analysis of the income statement data, the cost of goods sold most likely would be expressed as a percentage of:
A)net income.
B)net sales.
C)gross profit on sales.
D)total expenses.

Question

Quizplus · Accepted Answer

In a vertical analysis, each item on the income statement is expressed as a percentage of net sales. Cost of goods sold is a direct expense that is incurred in order to generate revenue, so it is most appropriately expressed as a percentage of net sales.

In a Vertical Analysis of the Income Statement Data, the Cost