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:

Large Part

A phrase indicating a significant portion or majority of a whole.

Elastic Demand

A situation where the quantity demanded of a product changes significantly in response to a change in price.

Substitutes

Products or services that can be used in place of each other; an increase in the price of one leads to an increase in demand for the other.

Available

Referring to resources or goods that are obtainable and can be utilized.