Vertical analysisRivera Company reported the following operating results for two consecuti
Vertical analysis
Rivera Company reported the following operating results for two consecutive years.
2005
Amount
Percent of Sales
Sales
$600,000
Cost of Goods Sold
400,000
Gross Margin on Sales
200,000
Operating Expenses
130,000
Income before Taxes
70,000
Income Taxes
30,000
Net Income
$ 40,000
2006
Amount
Percent of Sales
Sales
$580,000
Cost of Goods Sold
377,000
Gross Margin on Sales
203,000
Operating Expenses
150,000
Income before Taxes
53,000
Income Taxes
23,000
Net Income
$ 30,000
Required
Express each income statement component for each of the two years as a percent of sales.
