A company has $600,000 in short-term borrowings and $800,000 in long-term borrowings. What is the total equity and liabilities when using a vertical analysis of the statement of financial position?
A) 25%
B) 100%
C) $(200,000)
D) $1,400,000

Question

Quizplus · Accepted Answer

In a vertical analysis of the statement of financial position (balance sheet), the total equity and liabilities always represent 100% of the company's financial structure, regardless of the specific amounts of short-term or long-term borrowings.

A Company Has $600,000 in Short-Term Borrowings and $800,000 in Long-Term