If an analyst wishes to see how a company's net income as a percentage of net sales has changed from one year to the next,a vertical analysis would be the most appropriate approach.

Question

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Vertical analysis involves expressing financial statement line items as a percentage of a base amount, such as net sales. By using this method, an analyst can easily compare the change in net income as a percentage of net sales from one year to the next.

If an Analyst Wishes to See How a Company's Net