Question
18.Which of the following statements is false about vertical analysis? a.It is useful for analyzing changes in financial statements over time. b.Each line item is
18.Which of the following statements is false about vertical analysis?
a.It is useful for analyzing changes in financial statements over time.
b.Each line item is expressed as a percentage of some total or key amount within the same statement.
c.The dollar amount of change in each line item is calculated.
d.It is useful for analyzing relationships within a financial statement.
19.The following are line items from the vertical analysis of an income statement:
Amount Percent
Total revenues $600 300%
Total expenses 400 200Net income$200100%
What needs to be changed on the statement?
a.Total revenues should be the base expressed as 100%.
b.The percentage for net income should 25%.
c.The percentage for total expenses should be 33%.
d.None of these changes should be made.
20.Vertical analysis can be used to analyze changes
a.on a balance sheet.
b.over time.
c.on an income statement.
d.All of these choices are correct
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