Vertical analysis:
A)identifies the relative contribution made by each financial statement line item.
B)identifies trends over time.
C)provides an understanding of the relationships among various items on financial statements by expressing the differences in terms of dollars.
D)involves comparing amounts across different financial statements.

Question

Quizplus · Accepted Answer

Vertical analyses focus on important relationships between items on the same financial statement.These are compared vertically (one account balance versus another)and are typically expressed as percentages to reveal the relative contributions made by each financial statement item.

Vertical Analysis