An analysis in which all the components of an income statement are expressed as a percentage of net sales is called:
A) liquidity analysis.
B) horizontal analysis.
C) vertical analysis.
D) solvency analysis.

Question

Quizplus · Accepted Answer

A vertical analysis expresses all items in a financial statement as a percentage of a related base amount, typically sales revenue in the income statement. This allows for a comparison of the relative proportions of each item and can provide insights into trends or changes in financial performance. The other options listed are not relevant to this type of analysis.

An Analysis in Which All the Components of an Income