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    Vertical Analysis

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    The following income statement was prepared by Edwards Company for 2007:

    Sales $100,000
    Cost of goods sold $58,500
    Gross margin $41,500
    Selling and administrative expense $25,000
    Interest expense $3,000
    Total operating expenses $28,000
    Income before taxes $13,500
    Income tax expense $4,050
    Net income $9,450

    Perform vertical analysis for Edwards Company's 2007 income statement.

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    Solution Summary

    The solution explains how to perform a vertical analysis on the income statement.