The vertical analysis statement of Peterson,Inc.is as shown below:

The 20% shown for net income in 2017 signifies that net income ________.
A)is 20% of net sales revenues
B)increased by 20% over the previous year
C)is 20% of gross profit
D)equals 20 times of the income before income tax

Question

The vertical analysis statement of Peterson,Inc.is as shown below:

The 20% shown for net income in 2017 signifies that net income ________.
A)is 20% of net sales revenues 
B)increased by 20% over the previous year 
C)is 20% of gross profit 
D)equals 20 times of the income before income tax

Quizplus · Accepted Answer

The vertical analysis statement shows that net income for 2017 is 20% of net sales revenues. This means that for every dollar of net sales revenue earned by Peterson, Inc. in 2017, 20 cents was earned as net income.

The Vertical Analysis Statement of Peterson,Inc