All of the following statements about vertical analysis are true except
A) vertical analysis is also called common size analysis.
B) amounts on the income statement are expressed as a percentage of net sales.
C) vertical analysis shows the relative size of each item in the statement of financial position.
D) vertical analysis is also called trend analysis.

Question

Quizplus · Accepted Answer

Vertical analysis is not called trend analysis; trend analysis refers to examining financial statements over multiple periods to identify patterns or trends. Vertical analysis, on the other hand, involves expressing each item in a financial statement as a percentage of a base figure within the same statement.

All of the Following Statements About Vertical Analysis Are True