All of the Following Statements Regarding Vertical Analysis Are True

question 196

Multiple Choice

All of the following statements regarding vertical analysis are true except

• A) vertical analysis may be prepared for several periods to analyze changes in relationships over time
• B) in a vertical analysis of a balance sheet, each asset item is stated as a percent of total assets
• C) in a vertical analysis of an income statement, each item is stated as a percent of total expenses
• D) major differences between a company's vertical analysis and industry averages should be investigated