The Vertical Analysis Statement of Nobell Inc

question 86

Multiple Choice

The vertical analysis statement of Nobell Inc. is as below: The figure 16.5% shown for net income in 2015 signifies that:

• A)net income is 16.5% of net sales revenues.
• B)net income is increased by 16.5% over the previous year.
• C)net income is 16.5% of gross profit.
• D)net income is equal to 16.5 times of the income before income tax.

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Definitions:

Depletion

The allocation of the cost of a natural resource to expense in a rational and systematic manner over the resource’s useful life.

Natural Resources

Materials or substances occurring in nature which can be exploited for economic gain, such as minerals, forests, water, and fertile land.

Market Value

The market value at which a service or asset is currently available for purchase or sale.

Salvage Value

The projected remainder worth of a property upon reaching the end of its service period, frequently factored into depreciation estimations.