Create an Account

Already have account?

Forgot Your Password ?

Home / Questions / Perform a vertical analysis of financial statements

Perform a vertical analysis of financial statements

Perform a vertical analysis of financial statements

 

1) A vertical analysis differs from a horizontal analysis in that an item is selected as the base amount and all other items are computed as a percentage of the base amount.

 

 

2) The base amounts for a vertical analysis are net income and total equity.

 

 

3) Net sales at Kelly's Bakery increased from $40,000 to $60,000 and its cost of goods sold increased from $20,000 to $40,000, then vertical analysis based on net sales would show the following percentages for cost of goods sold (rounded to the nearest percent):

A) 40% and 20%.

B) 10% and 30%.

C) 50% and 67%.

D) 67% and 40%.

E) 33% and 50%

 

 

4) For vertical analysis purposes, the base item on the balance sheet is __________.

 

5) For vertical analysis purposes, the base item on the income statement is __________.

 

 

6) If Rick's net sales increased from $40,000 to $80,000 and its operating expenses increased from $30,000 to $50,000, then, using vertical analysis based on net sales, what percentages would show for  operating expenses for the two periods (to the nearest tenth of a percent)?

Dec 26 2019 View more View Less

Answer (UnSolved)

question Get Solution

Related Questions