A Vertical Analysis Is Primarily Concerned With

question 81

Multiple Choice

A vertical analysis is primarily concerned with:

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

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Definitions:

Current Liability

Obligations or debts that a company expects to settle within one fiscal year or the operating cycle, whichever is longer.

Balance Sheet

A report detailing a business's assets, liabilities, and owners' equity at a particular moment.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year or within the operating cycle of a business.

Fixed Asset Accounts

Accounts that track the purchase, depreciation, and disposal of long-term assets owned by a company.