What Type of Analysis Is Indicated by the Following A) Vertical Analysis
B) Horizontal Analysis
C) Liquidity Analysis
D)

question 159

Multiple Choice

What type of analysis is indicated by the following? $\begin{array}{lrrrr}&&&\text { Increase (Decrease) }\\&\text { Current Year } & \text { Preceding Year } & \text { Amount } & \text { Percent }\\\text { Current assets } & \$ 430,000 & \$ 500,000 & \$(70,000) & (14 \%) \\\text { Fixed assets } & 1,740,000 & 1,500,000 & 240,000 & 16 \%\end{array}$

• A) vertical analysis
• B) horizontal analysis
• C) liquidity analysis
• D) common-size analysis

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Definitions:

Cost Price

The total cost incurred to produce or purchase an item before any markup or selling expenses are added.

Operating Expense

Expenditures that a business incurs through its normal business operations.

Operating Profit

Earnings before interest and taxes (EBIT), representing the profit a business makes from its operations.

Selling Price

The amount for which a product or service is sold to the customer.