If vertical analysis,using total assets as the base,shows a decrease in current assets from 50% to 36%,this would always mean that:
A) total noncurrent assets have increased as a percentage of total assets
B) the dollar amount of noncurrent assets has increased
C) the current ratio has decreased
D) the dollar amount of total current assets has decreased

Question

Quizplus · Accepted Answer

When using vertical analysis with total assets as the base, a decrease in the percentage of current assets (from 50% to 36%) necessarily means that the percentage of total noncurrent assets in the total assets has increased, because the total must always equal 100%.

If Vertical Analysis,using Total Assets as the Base,shows a Decrease