Perform a Vertical Analysis for the Entry "Gross Sales" on the Portion

question 54

Short Answer

Perform a vertical analysis for the entry "Gross Sales" on the portion of an income statement shown below. (Round to the nearest tenth) $$\begin{array} { | l l |} \hline \text { Revenue } & \\\text { Gross Sales } & \$ 228,000 \\\text { Less: Sales Returns and Allowances } & 7,900 \\\text { Net Sales } & 220,100 \\\text { Cost of Good Sold } & \\\text { Merchandise Inventory, Jan. 1 } & 37,400 \\\text { Net purchases } & 55,900 \\\text { Freight In } & 675 \\\text { Goods Available for Sale } & 93,975 \\\text { Less: Merchandise Inventory, Dec. } 31 & 85,400 \\\text { Cost of Goods Sold } & 8,575 \\\text { Gross Margin } & \$ 211,525 \\\hline\end{array}$$

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Definitions:

Cannibalization

The decrease in the number of sales, income, or market presence of an existing product caused by the launching of a new product by the same manufacturer.

Corporate Branding

Corporate branding is the practice of promoting the brand name of a corporate entity, as opposed to specific products or services, to enhance its reputation and identity.

Samsung Electronics

A multinational electronics company headquartered in South Korea, known for manufacturing a wide range of consumer and industry electronics, including smartphones, TVs, and semiconductors.

Samsung Life Insurance

A major life insurance company based in South Korea, providing a range of life insurance and financial services.