Vertical analysis involves comparing amounts in the financial statements for a single period,but an analyst may usefully compare vertical analysis results for two or more periods.

Question

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Vertical analysis can help an analyst compare the relative proportions of different line items in a financial statement over time, highlighting trends and changes in the company's financial performance. Therefore, comparing vertical analysis results for two or more periods can be very useful for understanding a company's financial health and making informed decisions.

Vertical Analysis Involves Comparing Amounts in the Financial Statements for a Single