In vertical analysis,the base used for comparison on the balance sheet is
A)total stockholders' equity.
B)total liabilities.
C)total liabilities plus total stockholders' equity or total assets.
D)none of the above

Question

Quizplus · Accepted Answer

In vertical analysis, the base used for comparison on the balance sheet is either total liabilities plus total stockholders' equity or total assets, depending on the approach used. This is because the focus is on expressing each account as a percentage of the total amount of assets or liabilities and equity. A and B are not correct choices because only using total stockholders' equity or total liabilities would not provide a comprehensive view of the entire balance sheet. D is incorrect because there is a specific base used in vertical analysis.

In Vertical Analysis,the Base Used for Comparison on the Balance