Please Refer to the Vertical Analysis of Income Statement Data

question 133

Multiple Choice

Please refer to the vertical analysis of income statement data shown below: The figure 47.0% shown for Gross profit in 2014 signifies that:

• A)in 2014, gross profit is equal to 47% of net income.
• B)in 2014, gross profit is up 47% versus the previous year.
• C)in 2014, gross profit is 47% of net sales revenue.
• D)in 2014, gross profit is 47% of cost of revenues.

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Definitions:

Total Income

Total Income refers to the aggregate earnings of an individual or organization from all sources before any deductions are made.

Benefits-received Principle

The concept that individuals should pay taxes in proportion to the benefits they receive from government services.

Gasoline Tax

A levy imposed by governments on the sale of gasoline, used primarily to fund transportation initiatives.

Lump-sum Tax

A fixed tax amount not dependent on the taxpayer's income level or financial transactions.