Which of the following is the definition of vertical analysis?
A)Vertical analysis is the practice of comparing a company with other companies that are leaders.
B)Vertical analysis is the analysis in which percentages are computed by selecting a base year as 100% and expressing amounts for following years as a percentage of the base amount.
C)Vertical analysis is the analysis of a financial statement that reveals the relationship of each statement item to a specified base, which is the 100% figure.
D)Vertical analysis is the study of percentage changes in comparative financial statements.

Question

Quizplus · Accepted Answer

Vertical analysis involves analyzing financial statements by expressing each item as a percentage of a base figure, typically total sales or total assets, to understand the relative size of each item.

Which of the Following Is the Definition of Vertical Analysis