All of the Following Statements About Vertical Analysis Are True

question 48

Multiple Choice

All of the following statements about vertical analysis are true except

• A) vertical analysis makes it easier to for intercompany comparisons.
• B) vertical analysis is seldom performed on the income statement.
• C) vertical analysis makes it easier to compare companies of different sizes.
• D) vertical analysis is seldom performed on the cash flow statement.

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Definitions:

Razor-And-Razor-Blade

A business model where a company sells a durable product at a low price (razor) and then sells consumable products that are needed to use the initial product (razor blades) at a higher margin.

Printer-And-Ink

A common business model in the printing industry where printers are sold at a low cost and the recurring revenue is generated through the sales of ink cartridges.

Ubiquitous

Present, appearing, or found everywhere; often used to describe technology or phenomena that are widespread and common in daily life.

Razor-And-Razor-Blade Revenue Model

A business strategy where a company sells a durable product at a low price to increase the sale of disposable complementary products.