In Performing a Vertical Analysis the Base for Cost of Goods

question 219

Multiple Choice

In performing a vertical analysis the base for cost of goods sold is

• A) total selling expenses.
• B) net sales.
• C) total revenues.
• D) total expenses.

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Definitions:

Net Income

The total earnings of an organization after subtracting all expenses, taxes, and costs from its total revenue.

Net Margin

A financial metric that shows the percentage of revenue remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's total revenue.

Sales

The process of selling goods or services to customers in exchange for money or other compensation.

Net Margin

A profitability metric calculated as net income divided by revenue, expressed as a percentage, indicating how much of each dollar in revenues is translated into profits.