1.In performing vertical analysis, the base for inventory is:

A.

total current assets.

B.

total liabilities and stockholders' equity.

C.

total cash and cash equivalents.

D.

total assets.

2.Expressing cash and cash equivalents as a percentage of total assets is an example of:

A.

ratio analysis.

B.

horizontal analysis.

C.

economic value added.

D.

vertical analysis.

3.On a statement of cash flows, activities that affect longminusterm

assets are classified as:

A.

financing activities.

B.

stockholders' equity activities.

C.

investing activities.

D.

operating activities.

4.Which of the following is typically used as the base in a vertical analysis of an income statement?

A.

gross profit

B.

operating income

C.

net income

D.

net sales

5.On the statement of cash flows, financing activities involve:

A.

acquiring longterm assets.

B.

lending money.

C.

borrowing by signing a longterm note.

D.

purchasing investments.