Which of the following is typically used as the base in a vertical analysis of an income statement?
A)gross profit
B)operating income
C)net income
D)net sales

Question

Quizplus · Accepted Answer

Net sales is typically used as the base in a vertical analysis of an income statement because it represents the total revenue generated from sales before any expenses or deductions are accounted for. Dividing each income statement item by net sales allows for a percentage comparison and analysis of each item's contribution to the overall revenue.

Which of the Following Is Typically Used as the Base