Oglethorpe Company Reports the Following Information from the Vertical Analysis

question 24

Multiple Choice

Oglethorpe Company reports the following information from the vertical analysis of their income statement: Which of the following statements could be logically concluded from the above data?

• A)The company made a higher gross profit in 2014 than in 2013.
• B)The company made higher net income in 2014 than in 2013.
• C)The company has improved the profit they make per dollar of sales in 2014.
• D)The company's total net income increased by 0.3% in 2014.

---

Definitions:

Expected Return

The average of all possible returns for an investment, weighted by the probability of each outcome, indicating the potential return over time.

Capital Asset Pricing Model

A theory detailing how systematic risk correlates with the expected return for investments, mainly in the stock market.

Stock Correlation

A statistical measure that describes how the movements of two stocks are related to each other.

Risky Assets

Assets that carry a significant degree of risk of loss, often associated with higher potential returns as compensation for the risk taken.