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 study of percentage changes in comparative financial statements.
D) 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.

Question

Quizplus · Accepted Answer

Vertical analysis is a method where each item on a financial statement is listed as a percentage of another item, typically showing each item's proportion of total sales or total assets, where the base figure is considered 100%.

Which of the Following Is the Definition of Vertical Analysis