The percentage analysis of accounts payable to total liabilities is an example of:
A) liquidity analysis.
B) current position analysis.
C) vertical analysis.
D) component analysis.

Question

Quizplus · Accepted Answer

The percentage analysis of accounts payable to total liabilities is an example of vertical analysis, which involves comparing individual items in a financial statement to a base amount (in this case, total liabilities). This type of analysis is commonly used to identify trends and changes in the financial statement. Liquidity analysis (A) focuses on a company's ability to meet short-term obligations, while current position analysis (B) looks at a company's overall financial health. Component analysis (D) involves breaking down various components of a financial statement for analysis.

The Percentage Analysis of Accounts Payable to Total Liabilities Is