All of the following statements regarding vertical analysis are true except
A) vertical analysis may be prepared for several periods to analyze changes in relationships over time
B) in a vertical analysis of a balance sheet, each asset item is stated as a percent of total assets
C) in a vertical analysis of an income statement, each item is stated as a percent of total expenses
D) major differences between a company's vertical analysis and industry averages should be investigated

Question

Quizplus · Accepted Answer

In a vertical analysis of an income statement, each item is stated as a percent of total revenues, not total expenses.

All of the Following Statements Regarding Vertical Analysis Are True