The Vertical Analysis of the Income Statement of Settler, Inc

question 113

Multiple Choice

The vertical analysis of the income statement of Settler, Inc. is as shown below: The 20% shown for net income in 2019 signifies that net income ________.

• A) is 20% of net sales revenues
• B) increased by 20% over the previous year
• C) is 20% of gross profit
• D) equals 20 times of the income before income tax

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Definitions:

Semiannual Interest

Interest that is computed and disbursed semi-annually, commonly associated with bonds and loans.

Straight-line Method

An approach to calculate depreciation or amortization by equally dividing the asset's expense over its useful life.

Issue Bonds

The act of a corporation or government borrowing money from investors by selling them bond securities.

Sold For

Refers to the final price at which a product, asset, or service is sold to a buyer in a transaction.