Athletic World reports the following vertical analysis percentages. 2021 2020Sales 100% 100%Cost of goods sold 48% 56%Operating expenses 35% 30%Did Athletic World’s income before tax as a percentage of sales increase, decrease, or stay the same? If net income as a percentage of sales increases, does that mean net income also increases? Explain.
Athletic World reports the following vertical analysis percentages. 2021 2020Sales 100% 100%Cost of goods sold 48% 56%Operating expenses 35% 30%Did Athletic World’s income before tax as a percentage of sales increase, decrease, or stay the same? If net income as a percentage of sales increases, does that mean net income also increases? Explain.
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter4: Profitability Analysis
Section: Chapter Questions
Problem 23PC
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Question
Athletic World reports the following vertical analysis percentages.
2021 2020
Sales 100% 100%
Cost of goods sold 48% 56%
Operating expenses 35% 30%
Did Athletic World’s income before tax as a percentage of sales increase, decrease, or stay the same? If net income as a percentage of sales increases, does that mean net income also increases? Explain.
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