When Performing Vertical Analysis the Base Amount for Administrative Expense

question 63

Multiple Choice

When performing vertical analysis the base amount for administrative expense is generally

• A) administrative expense in a previous year.
• B) net sales.
• C) gross profit.
• D) fixed assets.

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Definitions:

Window Dress

Practices by mutual funds and other portfolio managers near the reporting period end to improve the appearance of the financial statements.

Current Ratio

A financial metric that compares a company's current assets to its current liabilities, indicating its ability to meet short-term debt obligations.

Financial Strength

A measure of the stability and health of an organization's finances, often assessed by factors like liquidity, solvency, and profitability.

Days' Sales Outstanding

An indicator of how quickly a company collects cash from accounts receivable after a sale over a given period.