Vertical Analysis Is a Technique That Expresses Each Item in a Financial

question 200

Multiple Choice

Vertical analysis is a technique that expresses each item in a financial statement

• A) in dollars and cents.
• B) as a percent of the item in the previous year.
• C) as a percent of a base amount.
• D) starting with the highest value down to the lowest value.

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Definitions:

GAAP

Generally Accepted Accounting Principles, a common set of accounting rules and standards used in the United States for financial reporting.

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board (IASB) that are becoming the global standard for the preparation of public company financial statements.

Financial Statements

Documents that provide an overview of a company's financial condition, including income statement, balance sheet, and cash flow statement.

ROE

Return on Equity - a financial ratio that measures a company's profitability by revealing how much profit a company generates with the money shareholders have invested.