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18 November, 05:53

Income statement information for Sadie Company is below:

Sales $175,000

Cost of goods sold 115,000

Gross profit $ 60,000

1. Using vertical analysis of the income statement for Sadie Company, determine the gross profit margin.

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  1. 18 November, 06:10
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    34.285%

    Explanation:

    Income Statement:

    Particular Amount

    Sales $175,000

    Less: Cost of goods sold $115,000

    Gross profit $ 60,000

    Gross profit Margin = [ (Net Sales - cost of goods sold) / Net Sales]100

    Gross profit Margin = [ ($175,000 - $115,000) / $175,000] 100

    Gross profit Margin = [$60,000 / $175,000]100

    Gross profit Margin = [0.34285]100

    Gross profit Margin = 34.285%
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