In vertical analysis, it is customary to express each item on the balance sheet as a percentage of either the total assets or the total of liabilities and stockholders' equity.

Question

Quizplus · Accepted Answer

This is correct. Vertical analysis involves expressing each item on the balance sheet as a percentage of either the total assets or the total liabilities and stockholders' equity. This helps to provide a clearer understanding of the relative proportions of each item and the overall financial health of the company.

In Vertical Analysis, It Is Customary to Express Each Item