In vertical analysis of the balance sheet,each item is expressed as a percentage of
A) current liabilities.
B) current assets.
C) long-term liabilities.
D) total assets or of total liabilities and stockholders' equity.

Question

Quizplus · Accepted Answer

In vertical analysis of the balance sheet, each item is expressed as a percentage of either total assets or of total liabilities and stockholders' equity. This allows for a comparison of the relative size of each item in the context of the entire balance sheet. Expressing items as a percentage of current liabilities, current assets, or long-term liabilities would not provide the same level of context or comparison.

In Vertical Analysis of the Balance Sheet,each Item Is Expressed