Question

Solve the following sums Income statement for Mars for 2018 and 2019 follows: Particulars 2019 ($)...

Solve the following sums

Income statement for Mars for 2018 and 2019 follows:

Particulars

2019 ($)

2018 ($)

Sales

250,000

180,000

Cost of Goods sold

140,000

110,000

Income before taxes

25000

25000

Income Tax expenses

4000

3000

Selling expenses

20,000

19,000

Interest expenses

3,500

4,500

Required:

Perform a Vertical Analysis showing each income statement component as a percent of sales for each year.

Homework Answers

Answer #1
Particulars 2019 Percent 2018 Percent
Sales 2,50,000 100% 1,80,000 100%
Cost of goods sold 1,40,000 (140000/250000)x100 = 56% 1,10,000 (110000/180000)x100 = 61%
Income before taxes 25,000 (25000/250000)x100 = 10% 25,000 (25000/180000)x100 = 13.88%
Income tax expenses 4,000 (4000/250000)x100 = 1.6% 3,000 (3000/180000)x100 = 1.66%
Selling expense 20,000 (20000/250000)x100 = 8% 19,000 (19000/180000)x100 = 10.55%
Interest expenses 3,500 (3500/250000)x100 = 1.4% 4,500 (4500/180000)x100 = 2.5%

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