Question

Saira, Inc. has the following income statement (in millions): SAIRA, INC. Income Statement For the Year Ended December 31, 2017 Net Sales $300 Cost of Goods Sold 180 Gross Profit 120 Operating Expenses 45 Net Income $75 Using vertical analysis, what percentage is assigned to Cost of Goods Sold?

Answer 1

Answer:

60%

Explanation:

Percentage assigned to cost of goods sold

= Cost of goods sold / Sales

= $180 / $300

= 0.60 or 60%

Answer 2

Answer:

The percentage is assigned to Cost of Goods Sold is 60%

Explanation:

The percentage assigned to cost of good sold is the cost-to-sales ratio of a company which show how much direct cost to produce a product that $1 of sales is required.

For Saira, Inc.; the percentage assigned to cost of goods sold for the year ended 2017 is calculated as:

Percentage assigned to cost of goods sold in 2017 = Cost of good sold in 2017/Net Sales in 2017 = 180/300 = 0.6 = 60%.

So, the answer is 60%.