All of the Following Statements Regarding Vertical Analysis Are True

Multiple Choice

All of the following statements regarding vertical analysis are true except:

A) Vertical analysis may be prepared for several periods to analyze changes in relationships over time.
B) In a vertical analysis of a balance sheet, each asset item is stated as a percent of total assets.
C) In a vertical analysis of an income statement, each item is stated as a percent of total expenses.
D) Major differences between a company's vertical analysis and industry averages should be investigated.