Q1) Following is the income statement for Commerce Corporation for year ended December 31, 20X7:
Commerce Corporation
Income Statement
For the Year Ended December 31, 20X7 |
| Net sales |
$661,000 |
| Expenses: |
| Cost of goods sold |
268,500 |
| Selling expenses |
45,000 |
| General expenses |
49,300 |
| Interest expense |
35,000 |
| Income tax expense |
30,000 |
| Total expenses |
427,800 |
| Net income |
$233,200 |
a) Make a vertical analysis of income statement illustrating suitable percentages for each item listed above.
b) What extra information would you require to find out whether these percentages are good or bad?