When using vertical analysis,we express balance sheet accounts as a percentage of
A)Sales.
B)Total assets.
C)Total liabilities.
D)Total stockholders' equity.

Question

Quizplus · Accepted Answer

Vertical analysis expresses each item on the financial statement as a percentage of a base amount, which is typically a total or subtotal on the same statement. When using vertical analysis for the balance sheet, we express each account as a percentage of the total assets. This allows for a better understanding of the composition of assets and how they are being utilized by the company.

When Using Vertical Analysis,we Express Balance Sheet Accounts as a Percentage