Which of the Following Is the Definition of Vertical Analysis

question 53

Multiple Choice

Which of the following is the definition of vertical analysis?

• A)Vertical analysis is the analysis in which percentages are computed by selecting a base year as 100% and expressing amounts for following years as a percentage of the base amount.
• B)Vertical analysis is the practice of comparing a company with other companies that are leaders.
• C)Vertical analysis is the study of percentage changes in comparative financial statements.
• D)Vertical analysis is the analysis of a financial statement that reveals the relationship of each statement item to a specified base,which is the 100% figure.

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Definitions:

Leisure Time

Free time that an individual can spend away from work, chores, and other obligatory activities, often used for rest, recreation, or personal interests.

Value Added

Value Added refers to the increase in value that a business creates by undergoing a production process, calculated as the difference between the cost of raw materials and the price of the finished product.

Income Approach

A method of calculating GDP that sums up total national income, including wages, rent, interest, and profits.

Consumer Price Index (CPI)

An indicator used to gauge inflation by examining the weighted average prices of a selection of consumer products and services.