Answered

Vertical analysis (common-size) percentages for Ivanhoe Company's sales, cost of goods sold, and expenses are listed here.

Vertical Analysis 2023 2022 2021
Sales revenue 100.0% 100.0% 100.0%
Cost of goods sold 60.6 62.9 63.7
Operating expenses 25.6 28.6 28.0

Required:
Calculate Cullumber’s net income as a percent of sales.

Answer :

Kolawole845

Answer:

Year                                        2023 2022 2021

Net income/sales ratio               13.8% 8.5% 8.3%

Explanation: The net income to sales ratio is computed as net income divided by sales multiplied by 100

Year                               2023 2022 2021

                                          %         %             %

Sales revenue                   100  100  100

Less cost of goods sold (60.6) (62.9) (63.7)

Gross profit                            39.4 37.1       36.3

Less Operating expenses (25.6) (28.6 (28)

Net Income                          13.8 8.5         8.3

Net income to sales = (Net income / sales)    × 100

                                               = 13.8/100    8.5/100    8.3/100  

Net income/sales                13.8% 8.5% 8.3%

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