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A. Vertical analysis in the income statement causes all accounts to be related as a percentage of net income.
B. Percentages used in vertical analysis make identifying trends difficult.
C. Vertical analysis in the balance sheet causes all accounts to be related as a percentage of total assets.
D. Percentages can be used in the balance sheet without being associated with the numbers they represent.
C. Vertical analysis in the balance sheet causes all accounts to be related as a percentage of total assets.
c
C>>>>>>>>> Vertical analysis in the balance sheet causes all accounts to be related as a percentage of total assets.
All assets are shown as a percentage of total assets and current liabilities, long term debts and equities are shown as a percentage of the total liabilities and stockholders’ equity.
Hence the option (C) represent upto somewhat extent.
Option (c) is correct representative of vertical analysis.
Vertical analysis is an approach commonly used for comparative analysis between two fiscal years by reducing numbers in financial statements to simple percentage for each year.
The Correct answer would be A & C.
