Question

If Net Sales at​ Sassy's Sweet Factory increased from​ $37,000 to​ $58,000 and its cost of goods sold increased from​ $17,000 to​ $43,000, the vertical analysis based on net sales would show the following percentages for cost of goods​ sold: (Round your final answer to the nearest​ percentage.)

Answer 1

Answer:

The vertical analysis based on net sales would show 45.94% and 74.13% for cost of goods​ sold.

Explanation:

Vertical Analysis: The vertical analysis does the analysis of the financial statements which is based on the sales value.

In mathematically,

Vertical Analysis = Financial Statement item ÷ sales value × 100

So,

For the cost of good sold. the vertical analysis would be:

For the Latest amount of cost of good sold:

= Latest amount of cost of goods sold ÷ Latest sales value × 100

= $17,000 ÷ $37,000 × 100

= 45.94%

For the updated amount of cost of goods sold:

= updated amount of cost of goods sold ÷ updated sales value × 100

= $43,000 ÷ $58,000 × 100

= 74.13%

Hence, the vertical analysis based on net sales would show 45.94% and 74.13% for the cost of goods​ sold.