Vertical analysis is a(n):
A)Longitudinal comparison.
B)Industrial ratio.
C)Cross-sectional comparison.
D)Historical ratio.

Question

Quizplus · Accepted Answer

Vertical analysis is a method used in financial analysis to compare different items in a single financial period, making it a cross-sectional comparison. It involves comparing various line items on a financial statement with a key figure from the same statement, such as sales revenue on an income statement or total assets on a balance sheet. This method helps in understanding the structure and composition of financial statements.

Vertical Analysis Is A(n)