Question

When performing a vertical analysis which income statement item do you use to determine the cost contribution for each expense category? (What is the denominator?)

Answer 1

Answer:

sorry I don't fhfhgnjtiuoyjko

Answer 2

Sales are taken as the denominator.

• Vertical Analysis of an income statement is a statement in which a method of financial statement analysis is used to list each item in each line one below the other as a percentage of a base figure within the statement.
• Sales refers to any transactions or exchange where money or value is exchanged for the ownership of a good or service.
• While making a vertical analysis statement of income the base figure that is the denominator is generally taken as sales. It is used to determine the cost of contribution for each expense category.

• The formula to do the Vertical analysis of the income statement = (Statement line item / Total base figure) X 100

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