Asked by Jasmine Collymore on Jul 11, 2024
Verified
When doing a vertical analysis, which of the following is a typical comparison item set at 100%?
A) Total liabilities
B) Total stockholders' equity
C) Total cash
D) Total assets
Vertical Analysis
A method of financial statement analysis where each entry for a given period is presented as a proportion of a fixed line item.
Total Assets
The sum of all assets owned by a company, including cash, inventory, and property.
- Apply vertical analysis techniques on financial statements.
Verified Answer
LT
Le Thi Huong (K14 DN)Jul 12, 2024
Final Answer :
D
Explanation :
In a vertical analysis of a balance sheet, total assets are typically set at 100%. This allows for the comparison of each individual asset, liability, and equity item as a percentage of total assets, facilitating an understanding of the relative size and importance of each item in the context of the overall financial position of the company.
Learning Objectives
- Apply vertical analysis techniques on financial statements.
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