Vertical analysis involves comparing each figure in the financial statements with a corresponding figure of the previous year.

Name: Vertical analysis involves comparing each figure in the financial statements with a corresponding figure of the previous year.
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Question

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Vertical analysis involves expressing each figure in the financial statements as a percentage of a base figure, such as total assets or net sales. It does not involve comparing figures to the previous year. That is horizontal analysis.

Vertical Analysis Involves Comparing Each Figure in the Financial Statements