Mussa Corporation reports the following data: In vertical analysis,the cost of goods sold percentage is closest to:
A)36%.
B)57%.
C)64%.
D)175%.

Question

Mussa Corporation reports the following data:  In vertical analysis,the cost of goods sold percentage is closest to:
A)36%. 
B)57%. 
C)64%. 
D)175%.

Quizplus · Accepted Answer

In vertical analysis, each line item is presented as a percentage of a base amount. For income statement analysis, the base amount is typically total revenue. The cost of goods sold percentage can be found by dividing the cost of goods sold by the total revenue and multiplying by 100 to get a percentage. Without the full financial statement, it is impossible to calculate the exact percentage. However, based on typical industry benchmarks, a cost of goods sold percentage in the range of 55-75% is common for retailers and manufacturers, making choice C of 64% the closest to the possible options.

Mussa Corporation Reports the Following Data: in Vertical Analysis,the