Question

which of the following can be used as a base amount in a vertical analysis of an income statement? question 10 options: a) selling and administrative expenses b) income from operations c) net sales d) cost of goods sold

Answer 1

The base amount used in a vertical analysis of an income statement is net sales.

Step-by-step explanation:

In a vertical analysis of an income statement, the base amount is used as a reference point to calculate other items as a percentage of the base. The most common base amount used in a vertical analysis of an income statement is net sales.

This is because net sales represents the total revenue generated by a company. Other items such as selling and administrative expenses, income from operations, and cost of goods sold can be expressed as a percentage of net sales.