Oglethorpe Company reports the following information from the vertical analysis of their balance sheet:
Current assets:
23.5 % in 2014
23.9% in 2013
Which of the following statements could be logically concluded from the above data?
A) The company's current ratio declined.
B) The company's current assets declined in proportion to its total assets.
C) The company's ability to pay current liabilities declined.
D) The company's total current assets declined by 0.4%.

Question

Quizplus · Accepted Answer

The vertical analysis shows the proportion of current assets to total assets. An increase from 23.5% in 2014 to 23.9% in 2013 indicates that the proportion of current assets to total assets increased, not declined. Choices A, C, and D cannot be directly concluded from the given data without additional information such as the total assets or current liabilities.

Oglethorpe Company Reports the Following Information from the Vertical Analysis