Question
True or False: 1. Vertical analysis always involves comparing financial statement elements over a span of time. 2. Financial ratio analysis is a form of
True or False:
1. Vertical analysis always involves comparing financial statement elements over a span of time.
2. Financial ratio analysis is a form of horizontal analysis in that comparisons are made between different accounts in the same set of financial statements.
3. A limitation of financial statement analysis stems from the discretion of management to choose accounting procedures that cast the best light on the firm's performance.
4. Solvency ratios are used to analyze the long-term debt-paying ability and the composition of the financing structure of the firm.
5. If product costs are misclassified as selling costs, the cost per unit will be understated.
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