Vertical analysis looks at:
A) percentage changes in the balances shown in comparative financial statements
B) the change in key financial statement ratios over a specified period of time
C) the dollar amount of the change in various financial statement amounts from year to year
D) individual financial statement items expressed as a percentage of a base (which represents 100%)

Question

Quizplus · Accepted Answer

Vertical analysis involves calculating individual financial statement items as a percentage of a base amount, usually representing 100%. This allows for easy comparison of different items within the same financial statement and helps identify trends or patterns in financial data. Option A is describing horizontal analysis, option B is describing trend analysis, and option C is describing dollar analysis.

Vertical Analysis Looks At