Oglethorpe Company reports the following information from the vertical analysis of their balance sheet: Current assets:
23.5 % in 2017
23.9% in 2016
Which of the following statements could be logically concluded from the above data?
A)The company's ability to pay current liabilities declined.
B)The company's current ratio declined.
C)The company's total current assets declined by 0.4%.
D)The company's current assets declined in proportion to its total assets.

Question

Quizplus · Accepted Answer

The data shows that the proportion of current assets to total assets decreased by 0.4%, which means the current assets declined in proportion to total assets. There is no information given to determine the company's ability to pay current liabilities or current ratio from the vertical analysis of the balance sheet.

Oglethorpe Company Reports the Following Information from the Vertical Analysis