Prepare a Vertical Analysis of the Income Statement Shown Below

question 76

Essay

Prepare a vertical analysis of the income statement shown below.(Round to two decimal places. )
$\begin{array}{c}\text {Trucker, Inc.}\\\text {Income Statement}\\\text {For the Year Ended December 31, 2017}\\\\\begin{array}{lr}\text { Net Sales } & \$ 7,000 \\\text { Cost of Goods Sold } & \underline{3,800} \\\text { Gross Profit } & 3,200\\\text { Operating Expenses: }\\\text { Selling Expenses } & 950 \\\text { Administrative Expenses } & \underline{670} \\\text { Total Operating Expenses } & \underline{1,620} \\\text { Operating Income } & 1,580 \\\text { Other Revenues and (Expenses): } &\\\text { Interest Revenue } & 0 \\\text { Interest Expense } & \underline{(750)} \\\text { Total Revenues and (Expenses) } & \underline{(750)} \\\text { Income Before Income Taxes } & 830 \\\text { Income Tax Expense } &\underline{150} \\\text { Net Income } & \underline{\$ 680}\end{array}\end{array}$

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Definitions:

Scale

refers to the size of a business operation or the capacity of a company's production output.

Production Function

An equation or model that describes the relationship between inputs (like labor and capital) and outputs (goods or services) in the production process.

Capital

Assets or wealth, whether in the form of money or other resources, that are used or invested to generate income.

Determinant Of Output

Factors that influence the quantity of goods and services an economy can produce, such as labor, capital, technology, and government policies.