Question

Select the correct statement regarding vertical analysis.

Multiple Choice:
A. Vertical analysis of the income statement involves showing each item as a percentage of sales.
B. Vertical analysis of the balance sheet involves showing each asset as a percentage of total assets.
C. Vertical analysis examines two or more items from the financial statements of one accounting period.
D. All of these answers are correct.

Answer 1

D. All of these answers are correct.

Step-by-step explanation:

The vertical analysis is the analysis of each item of the financial statement based on the percentage

Like in the income statement, each of the items of the income statement should be a percentage of sales

And, in the balance sheet, each of the items of the balance sheet should be the percentage of total assets

Plus it also examines the two or more items of one accounting period