The vertical analysis of the income statement of Settler, Inc. is as shown below: (In millions) 2019 Percent of Total 2018 Percent of Total Net Sales $6,355 100.0% $4,920 100.0% Cost of Goods Sold 3,370 53.0 2,200 44.7 Gross Profit 2,985 47.0 2,720 55.3 Operating Expenses: Selling Expenses 675 10.6 580 11.8 Administrative Expenses 410 6.5 425 8.6 Total Operating Expenses 1,085 17.1 1,005 20.4 Operating Income 1,900 29.9 1,715 34.9 Other Income and (Expenses): Interest Expense (400) (6.3) (695) (14.1) Total Other Income and (Expenses) (400) (6.3) (695) (14.1) Income Before Income Taxes 1,500 23.6 1,020 20.7 Income Tax Expense 230 3.6 210 4.3 Net Income $1,270 20.0% $810 16.5% The 20% shown for net income in 2019 signifies that net income ________.

Respuesta :

Answer:

20% of the net sales revenue

Explanation:

The net income is $ 1,270, and the net sales revenue is $6,355

And, we know that profit margin equals to

= (Net income ÷ net sales) × 100

= ($1,270 ÷ $6,355) × 100

= 19.98% approx

So, in this question, we calculate the profit margin

Therefore, the net income would be 20% of the net sales revenue.  

And, other information which is given in the question is not useful for the computation part. Hence, ignored it.