An analysis in which all the components of an income statement are expressed as a percentage of sales is a
A) vertical analysis
B) horizontal analysis
C) liquidity analysis
D) solvency analysis

Question

Quizplus · Accepted Answer

An analysis in which all the components of an income statement are expressed as a percentage of sales is called a vertical analysis. It is used to compare the relative proportions of each line item to the revenue generated by the company. This type of analysis is helpful in identifying trends, highlighting areas of strength or weakness, and assessing the overall financial health of a company.

An Analysis in Which All the Components of an Income