Which of the following statements is true with respect to vertical analysis?

Multiple Choice

• It focuses on the relations among financial statement accounts at a given point in time.

• It focuses on the relations among income statement accounts, but not balance sheet accounts.

• It focuses on the relations among financial statement accounts over time.

• It focuses on the relations among balance sheet accounts, but not income statement accounts.

Assume a company provided the following balance sheet:

Current assets:				Current liabilities:
Cash	$	81,000		Accounts payable	$	90,000
Accounts receivable		50,000		Accrued liabilities		40,000
Inventory		150,000		Total current liabilities		130,000
Total current assets		281,000		Bonds payable		110,000
Property, plant & equipment, net		380,000		Total liabilities		240,000
				Stockholders equity:
				Common stock		170,000
				Retained earnings		251,000
				Total stockholders equity		421,000
Total assets	$	661,000		Total liabilities and stockholders equity	$	661,000

The debt-to-equity ratio is closest to:

Multiple Choice

• 0.73.

• 1.38.

• 0.57.

• 0.30.