Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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BC 266: EXCEL PROBLEM PR 17-2A:VERTICAL ANALYSIS
For 2016, Indigo Corp. initiated a sales promotion campaign that included an expenditure of $39,000 for advertising. At year end the company President is presented with the following condensed Comparative Income Statement:
20162015
Sales revenue $820,000 $600,000
COGS [Cost of Goods Sold]311,600240,000
Gross profit508,400360,000
Selling expenses 164,000 108,000
Administrative expenses 57,40054,000
Total operating expenses 221,400162,000
Income from operations [NOI] 287,000 198,000
Other income 65,600 48,000
Income before income tax 352,600 246,000
Income tax expense246,000180,000
Net Income [NI] 106,600 66,000
Prepare a Comparative Income Statement using Vertical Analysis for the two-year period. Present each item as a % of sales for the given year and round your values to one decimal place.
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