Question

For the vertical analysis, what is the percentage of total liabilities for December 31, 20x8?

Answer 1

To determine the percentage of total liabilities on December 31, 20x8, add up the liabilities (deposits, 300) and compare them to the total of assets and equity (160). The percentage is calculated by dividing total liabilities by total assets and equity, then multiplying by 100, resulting in 187.5%.

Step-by-step explanation:

For the vertical analysis, to calculate the percentage of total liabilities for December 31, 20x8, we would use the following information: Assets - reserves 30, bonds 50, and loans 50; Liabilities - deposits 300 and equity 30. First, we sum up the liabilities, which in this case, consist solely of deposits, and compare them to the total assets and equity to find out what percentage of the total liabilities they represent.

Here's how you do the calculation:

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The percentage of total liabilities to the combined total of assets and equity is 187.5% for December 31, 20x8.