The vertical analysis statement of Nobell Inc. is as below: The figure 16.5% shown for net income in 2015 signifies that:
A) net income is 16.5% of net sales revenues.
B) net income is increased by 16.5% over the previous year.
C) net income is 16.5% of gross profit.
D) net income is equal to 16.5 times of the income before income tax.

Question

The vertical analysis statement of Nobell Inc. is as below:  The figure 16.5% shown for net income in 2015 signifies that:
A) net income is 16.5% of net sales revenues. 
B) net income is increased by 16.5% over the previous year. 
C) net income is 16.5% of gross profit. 
D) net income is equal to 16.5 times of the income before income tax.

Quizplus · Accepted Answer

The vertical analysis statement shows the percentage of different items in relation to net sales revenues. Therefore, the figure 16.5% for net income in 2015 means that net income is 16.5% of net sales revenues.

The Vertical Analysis Statement of Nobell Inc