Final answer:
The financial analysis method that depicts the relationship of each component to the total within a single financial statement is vertical analysis. This method is incorporated in graph forms like pie graphs and bar graphs, which visually represent the data for easier comprehension.
Step-by-step explanation:
The financial analysis method used to show the relationship of each component to the total within a single financial statement is vertical analysis. This method displays each item on a financial statement as a percentage of a base figure, which helps in understanding the allocation of resources or distribution of elements within the statement. For example, in an income statement, each expense is shown as a percentage of total sales, providing insight into the cost structure and profitability of a business.
Graphical representations such as a bar graph or pie graph can also be used to visualise the data from vertical analysis. A pie graph is specifically well-suited to show how a total is divided among several categories, with the size of each slice representing the percentage share. Bar graphs can illustrate comparisons and trends effectively, particularly when grouped by category or over time.