Please refer to the vertical analysis of income statement data shown below:

The figure 47.0% shown for Gross profit in 2017 signifies that:
A) in 2017, gross profit is 47% of cost of sales.
B) in 2017, gross profit is equal to 47% of profit.
C) in 2017, gross profit is up 47% versus the previous year.
D) in 2017, gross profit is 47% of revenues.

Question

Please refer to the vertical analysis of income statement data shown below:

The figure 47.0% shown for Gross profit in 2017 signifies that:
A) in 2017, gross profit is 47% of cost of sales. 
B) in 2017, gross profit is equal to 47% of profit. 
C) in 2017, gross profit is up 47% versus the previous year. 
D) in 2017, gross profit is 47% of revenues.

Quizplus · Accepted Answer

The figure 47.0% shown for Gross profit in 2017 signifies that gross profit is 47% of revenues. This means that for every dollar in revenue earned, $0.47 is left over after deducting the cost of sales.

Please Refer to the Vertical Analysis of Income Statement Data