5. If, over a three-year period, sales increased by 30%, and cost of goods sold increased by 45% a) the sales trend is unfavourable, but the cost of goods sold trend is favourable. b) the sales trend is favourable, but the cost of goods sold trend is unfavourable. c) both trends are favourable. d) both trends are unfavourable. 6. Vertical analysis a) is a technique for evaluating a series of financial statement data over a period of time to determine the increase (decrease) that has taken place. b) expresses each item in a financial statement as a percent of a base amount. c) makes it more difficult to compare different companies. d) is also called trend analysis. 7. All of the following statements about vertical analysis are true except a) vertical analysis is also called common size analysis. b) amounts on the statement of income are expressed as a percentage of sales. c) vertical analysis shows the relative size of each item in the statement of financial position. d) vertical analysis is also called trend analysis. 8. On financial statements that include vertical analysis, which of the following is set at 100%? a) total liabilities b) net income c) total assets d) cost of goods sold