All of the following statements about vertical analysis are true except
A)Vertical analysis makes it easier to for intercompany comparisons.
B)Vertical analysis is seldom performed on the income statement.
C)Vertical analysis makes it easier to compare companies of different sizes.
D)Vertical analysis is seldom performed on the cash flow statement.

Question

Quizplus · Accepted Answer

Vertical analysis is commonly performed on both the balance sheet and income statement to analyze the proportions of each line item relative to a base amount. It is not limited to balance sheets and is not primarily used for intercompany comparisons or comparing companies of different sizes.

All of the Following Statements About Vertical Analysis Are True