If a balance sheet is subjected to vertical analysis which shows that current assets (using total assets as the base)have decreased from 53% to 36%,this would always mean that:
A) the dollar amount of current assets has decreased
B) current assets have decreased as a percentage of total assets
C) the dollar amount of total assets has decreased
D) the dollar amount of total assets has increased

Question

Quizplus · Accepted Answer

Vertical analysis expresses each balance sheet item as a percentage of total assets or liabilities. Therefore, if current assets have decreased from 53% to 36%, it means that current assets have decreased as a percentage of total assets. It doesn't provide any information about the dollar amount of current assets or total assets.

If a Balance Sheet Is Subjected to Vertical Analysis Which