Vertical analysis of financial statements is accomplished by preparing common-size statements.

Name: Vertical analysis of financial statements is accomplished by preparing common-size statements.
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Question

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Vertical analysis is done by preparing common-size financial statements, in which all items are expressed as a percentage of a base amount, such as total assets or net sales. This allows for easy comparison and evaluation of the relative importance of each item on the statement.

Vertical Analysis of Financial Statements Is Accomplished by Preparing Common-Size