Please Refer to the Vertical Analysis of a Section of a Balance

question 135

Multiple Choice

Please refer to the vertical analysis of a section of a balance sheet, shown below: Which of the following statements is valid regarding the data shown above?

• A)Cash grew 3.7% over the previous year balance.
• B)In 2014, Inventory represented 13.9% of net sales revenues.
• C)Other long-term assets dropped 5.5% over the 2-year period.
• D)Property, plant and equipment grew as a percentage of total assets over the 2-year period.

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Definitions:

Income Tax

A charge imposed by authorities on the earnings of individuals and enterprises operating within their territory.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating how much of an additional dollar earned will be taken in taxes.

Average Tax Rate

The proportion of total income that is paid as tax, calculated by dividing the total amount of tax paid by the total income.

Income Tax Liability

The total amount of income tax that an individual or corporation owes to the government, based on their taxable income.