Sports Emporium has two operating segments: sporting goods and sports apparel. The income statement for each operating segment is presented below. Required: 1. Complete the "%" columns to be used in a vertical analysis of Sports Emporium's two operating segments. Express each amount as a percentage of sales. (Round your answers to 1 decimal place.) 2. Use vertical analysis to compare the profitability of the two operating segments. Which segment has a higher net income as a percentage of net sales? Sporting Goods Sports Apparel rev: 12_07_2016_QC_CS-

Please refer to Explanation

Explanation:

1. When using Vertical Analysis, every item in the Income statement is depicted as a percentage of sales.

Sporting Goods Vertical Analysis

Net Sales = 1,800,00/1,800,000 = 100%

Cost of Goods Sold = 1,040,000/1,800,000 = 57.7%

Gross Profit = 760,000 /1,800,000 = 42.2%

Operating Expenses = 450,000 /1,800,000 = 25%

Operating Income = 310,000/1,800,000 = 17.2%

Other Income (Expense) =  20,000 /1,800,000 = 1.1%

Income before tax = 330,000 /1,800,000 = 18.3%

Income tax Expense = 80,000/1,800,000 = 4.4%

Net Income = 250,000/1,800,000 = 13.9%

Sports Apparel Vertical Analysis

Net Sales = 970,000/970,000 = 100%

Cost of Goods Sold = 440,000/970,000 = 45.4%

Gross Profit = 530,000/970,000 = 54.6%

Operating Expenses = 340,000/970,000 = 35.0%

Operating Income = 190,000/970,000 = 19.6%

Other Income (Expense) = 15,000/970,000 = 1.54%

Income before tax = 175,000/970,000 = 18.0%

Income tax Expense = 70,000/970,000 = 7.2%

Net Income = 105,000/970,000 = 10.8%

2. Comparison using Vertical Analysis

I have attached the income statement required for the question.

net worth is the difference between what you own and what you have. if you exceed your liabilities you have a positive net worth. if your liabilities are greater than your assets you have a negative net worth. its a snapshot of your financial situation. if you calculate your net worth you will see the end result of everything you've earned and spent as of now. net worth statements and all you asked of can you determine where you are, how to get where you want to be, if your spending   to much. honestly it can tell you a lot of things. i can go on, but you can paint the picture from here.

explanation:

answer; according to the ( irs );