An analysis procedure that uses percentages to compare each of the parts of an individual statement to a key dollar amount from the financial statements is:
A)Ratio analysis.
B)Vertical analysis.
C)Horizontal analysis.
D)Contribution analysis.

Question

Quizplus · Accepted Answer

When performing vertical analysis on an income statement, each item on the income statement is divided by sales. All items are presented as a percentage of sales. When performing vertical analysis on the balance sheet, each item on the balance sheet is divided by total assets. All items are presented as a percentage of total assets.

An Analysis Procedure That Uses Percentages to Compare Each of the Parts