Indicate Whether Each of the Following Statements About Financial Statement

question 138

Short Answer

Indicate whether each of the following statements about financial statement analysis is true or false.
Vertical analysis of a company's balance sheet is useful in assessing its liquidity.______
Common size financial statements are a form of vertical analysis,but the common size statements for two or more years may usefully be compared.______
Vertical analysis of a balance sheet involves converting each component to a percentage of stockholders' equity.______
Small percentage changes resulting from vertical analysis may still represent large dollar amounts; therefore,changes in both absolute dollar amounts and percentages should be examined.______
A common size income statement is prepared by converting each component to a percentage of net income.______

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Definitions:

Ethics

Moral principles that govern a person's behavior or the conducting of an activity.

Code of Conduct

A set of rules outlining the social norms, responsibilities, and expected behaviors of individuals within an organization or profession.