A Vertical Analysis of a Balance Sheet Shows That Current

question 86

Multiple Choice

A vertical analysis of a balance sheet shows that current assets have increased from 42% to 56%.This means that:

• A)current assets have increased as a percentage of total assets.
• B)the dollar amount of total assets has increased.
• C)the dollar amount of total assets has decreased.
• D)the dollar amount of long-term assets has increased.

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Definitions:

Market Price

The sale or purchase price of a service or asset in the current market.

After-tax Cost

The expense of an action or item after accounting for the impact of taxation.

Coupon

A financial term referring to the annual interest payment received by a bondholder from the bond's issuer until it matures.

Weighted Average Cost

An inventory valuation method which assumes goods are used in the order in which they were purchased, often leading to a cost that is somewhere between the oldest and newest products.