Which of the following analysis expresses each item in a financial statement as a percent of a base amount?
A) Variance analysis
B) Standard analysis
C) Vertical analysis
D) Horizontal analysis

Question

Quizplus · Accepted Answer

Vertical analysis, also known as common-size analysis, presents each item in a financial statement as a percentage of a base amount, usually net sales or total assets. This allows for easy comparison between different time periods or companies of different sizes. Variance analysis compares actual performance against budgeted or expected performance, standard analysis uses a predetermined set of benchmarks to evaluate performance, and horizontal analysis compares changes in financial statement items over time.

Which of the Following Analysis Expresses Each Item in a Financial