To Apply a Vertical Analysis to the Balance Sheet, the Base

question 24

Multiple Choice

To apply a vertical analysis to the balance sheet, the base amount usually selected is:

• A)either total liabilities or total shareholders' equity.
• B)total revenues.
• C)total assets.
• D)total liabilities.
• E)total shareholders' equity.

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Definitions:

Firm Benefits

Advantages or favorable factors resulting from the policies or practices of a particular company, including financial remuneration and non-monetary perks.

Liquidity

How effortlessly an asset can be turned into cash without altering its market price.

J. M. Keynes

An influential British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments.

Lockbox System

A service offered by banks to companies for receiving payments from customers; the bank collects and processes these payments directly to speed up the deposit process.