Which of the following is typically used as the base in a vertical analysis of an income statement?
A)Net sales
B)Net income
C)Gross sales
D)Cash

Question

Quizplus · Accepted Answer

Net sales is typically used as the base in a vertical analysis of an income statement because it represents the total revenue earned by a company during a given period of time. Dividing each line item by net sales allows for a comparison of how much each expense and revenue item contributes to the company's overall revenue.

Which of the Following Is Typically Used as the Base