The vertical analysis of the income statement of Bates,Inc.is as shown below: The figure 47.0% shown for gross profit in 2019 signifies that the gross profit is ________.
A) equal to 47.0% of net income
B) increased by 47.0% over the previous year
C) 47.0% of net sales revenue
D) 47.0% of cost of goods sold

Question

The vertical analysis of the income statement of Bates,Inc.is as shown below:  The figure 47.0% shown for gross profit in 2019 signifies that the gross profit is ________.
A) equal to 47.0% of net income 
B) increased by 47.0% over the previous year 
C) 47.0% of net sales revenue 
D) 47.0% of cost of goods sold

Quizplus · Accepted Answer

The figure 47.0% shown for gross profit in 2019 signifies that the gross profit is 47.0% of net sales revenue. This means that for every dollar of sales revenue, Bates, Inc. earned $0.47 in gross profit. It does not relate to net income or cost of goods sold.

The Vertical Analysis of the Income Statement of Bates,Inc