Which of the Following Statements Is True Regarding Vertical Analysis

question 120

Multiple Choice

Which of the following statements is true regarding vertical analysis?

• A)Common-size financial statements can be used to compare businesses of different sizes.
• B)Vertical analysis can only be used with balance sheet accounts.
• C)Vertical analysis can only be used with income statement accounts.
• D)Vertical analysis can only be used with retained earnings accounts.

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Definitions:

Total Quantity Demanded

The sum of all individual quantities of a good or service demanded at a given price level within a specified period.

Public Good

A product that is non-excludable and non-rivalrous in consumption, meaning its use by one individual does not reduce its availability to others.

Excludability

A characteristic of a good or service that allows owners or producers to prevent others from using it without permission.

Marginal-cost-marginal-benefit Rule

A principle suggesting that optimal decision making involves continuing an activity until the additional benefits no longer exceed the additional costs.