A vertical analysis is primarily concerned with:
A)the dollar amount of the change in various financial statement line items from year to year.
B)individual financial statement line items expressed as a percentage of a base (which represents 100%).
C)percentage changes in the balances of line items from comparative financial statements.
D)the change in key financial statement ratios over a specified period of time.

Question

Quizplus · Accepted Answer

A vertical analysis involves expressing each financial statement line item as a percentage of a base amount, usually total revenue or total assets. This allows for easier comparison of different line items and helps identify trends over time. It does not focus on dollar amounts or changes in ratios.

A Vertical Analysis Is Primarily Concerned With