The following information is provided from EZ Electronics' annual report for the years ended December 31:

-Refer to the EZ Electronics annual report above.Using vertical analysis,2011 cost of goods sold would be represented as ________.
A)100%
B)31%
C)43%
D)143%

Question

The following information is provided from EZ Electronics' annual report for the years ended December 31:

-Refer to the EZ Electronics annual report above.Using vertical analysis,2011 cost of goods sold would be represented as ________.
A)100% 
B)31% 
C)43% 
D)143%

Quizplus · Accepted Answer

In vertical analysis, each item on the financial statement is listed as a percentage of another item. For the income statement, this base item is typically total sales or revenue. Therefore, if the cost of goods sold (COGS) is represented as 31%, it means COGS is 31% of total sales or revenue for the year 2011. This method helps in understanding the proportion of each component relative to total sales.

The Following Information Is Provided from EZ Electronics' Annual Report