Asked by Veronika Khvan on Jul 08, 2024
Verified
Vertical analysis is useful in making comparisons of companies of different sizes.
Vertical Analysis
A financial analysis method where each entry for each of the three major categories of accounts (assets, liabilities, and equities) in a balance sheet is represented as a proportion of the total account.
- Differentiate between the utilization of horizontal (trend) analysis and vertical analysis for the preparation and interpretation of financial statements.
Verified Answer
PL
Paulina LeyvaJul 12, 2024
Final Answer :
True
Explanation :
Vertical analysis expresses financial statement data as a percentage of a common base, which makes it possible to compare companies of different sizes.
Learning Objectives
- Differentiate between the utilization of horizontal (trend) analysis and vertical analysis for the preparation and interpretation of financial statements.
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