The comparison of a company's financial condition and performance to a base amount is known as:
A)Financial reporting.
B)Horizontal ratios.
C)Liquidation analysis.
D)Sensitivity analysis.
E)Vertical analysis.

Question

Quizplus · Accepted Answer

Vertical analysis involves comparing a company's financial information to a base amount, usually the total revenue or assets. It allows for a better understanding of the composition and structure of the company's financial statements. Horizontal ratios compare financial information over a period of time, while liquidation analysis and sensitivity analysis are different types of financial analysis. Therefore, the best choice is E.

The Comparison of a Company's Financial Condition and Performance to a Base