Comparing operating expenses as a percentage of sales is an example of:

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Comparing operating expenses as a percentage of sales is a method of vertical analysis. Vertical analysis involves comparing items on a financial statement to a base amount, such as total sales or total assets, to gain insight into the proportionate size and relationship of each item. With vertical analysis, each item on the financial statement is expressed as a percentage of the base amount, making it easier to compare the relative sizes of each item. Horizontal analysis, on the other hand, involves comparing financial statement items across time periods to identify trends and changes. Diagonal analysis is not a recognized accounting term.

Comparing Operating Expenses as a Percentage of Sales Is an Example