Using Vertical Analysis on the Statement of Income, a Company's

question 76

True/False

Using vertical analysis on the statement of income, a company's net income as a percentage of sales is 15%; therefore, the cost of goods sold as a percentage of sales must be 85%.

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Definitions:

Income

The money received, usually from a job, business, or assets, over a certain period of time.

Income Distribution

The way in which total income is shared among the population or different segments of the economy.

Unequal

Lacking equality in size, quantity, or degree; not evenly distributed or balanced.

Lorenz Curve

The Lorenz Curve is a graphical representation of the distribution of income or wealth within a society, indicating the degree of inequality.