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.
2. Use vertical analysis to compare the profitability of the two operating segments. Which segment is more profitable?

Transcribed Image Text:

Net sales Cost of goods sold Gross profit Operating expenses Operating income SPORTS EMPORIUM Income Statement For the year ended December 31, 2024 Sporting Goods Amount % $1,800,000 1,040,000 760,000 450,000 310,000 20,000 330,000 80,000 $ 250,000 Other income (expense) Income before tax Income tax expense Net income Sports Apparel Amount $970,000 440,000 530,000 340,000 190,000 (15,000) 175,000 70,000 $105,000 %