Vertical analysis of income statement data most often involves a comparison of each income statement item with:
A)net sales.
B)gross profit on sales.
C)net income before taxes.
D)net income after taxes.

Question

Quizplus · Accepted Answer

Vertical analysis involves expressing each item on the income statement as a percentage of a common base, typically net sales. This allows for a comparison of the relative size of each item to the overall revenue generated by the company. Therefore, the most common comparison in vertical analysis of income statement data is with net sales.

Vertical Analysis of Income Statement Data Most Often Involves a Comparison