Vertical analysis expresses each item in a financial statement as a percentage of the same base amount.

Name: Vertical analysis expresses each item in a financial statement as a percentage of the same base amount.
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Question

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Vertical analysis, also known as Common Size analysis, is a technique where each item on a financial statement is expressed as a percentage of a common base amount. This enables comparison of each line item relative to the whole, making it easier to identify trends and areas of concern.

Vertical Analysis Expresses Each Item in a Financial Statement as a Percentage