A vertical analysis of a financial statement reveals the relationship of each statement item to its base amount,which is the 100% figure.

Question

Quizplus · Accepted Answer

This is correct. Vertical analysis expresses each item of a financial statement as a percentage of a base amount, which is typically 100%. This allows for easy comparison of the relative proportions of different line items within the same period or across multiple periods.

A Vertical Analysis of a Financial Statement Reveals the Relationship