A Vertical Analysis Is Primarily Concerned With

question 21

Multiple Choice

A vertical analysis is primarily concerned with:

• A)percentage changes in the balances shown in comparative financial statements.
• B)the change in key financial statement ratios over a specified period of time.
• C)individual financial statement items expressed as a percentage of a base which represents 100%).
• D)the dollar amount of the change in various financial statement amounts from year to year.

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Definitions:

Long-term Investment

Investments made with the expectation that they will yield benefits or appreciation over a period extending beyond one year.

Dividends

Payments made by a corporation to its shareholder members, often derived from the company's profits.

Minority Active Investment

An investment where the investor holds a non-controlling interest in a company but is still actively involved in its management or operations.

Equity Method

An accounting technique used for recording investments in associate companies where the investment is initially recognized and subsequently adjusted for the investor’s share of the net assets of the investee, including recognized income or loss.