A vertical analysis is primarily concerned with:
A)the change in key financial statement ratios over a specified period of time.
B)the dollar amount of the change in various financial statement amounts from year to year.
C)percentage changes in the balances shown in comparative financial statements.
D)individual financial statement items expressed as a percentage of a base (which represents 100%).

Question

Quizplus · Accepted Answer

A vertical analysis expresses individual financial statement items as a percentage of a base, typically representing 100%. This allows for easy comparison of different financial statement items and analysis of trends over time. Choices A, B, and C are not accurate descriptions of a vertical analysis.

A Vertical Analysis Is Primarily Concerned With