Indicate Whether Each of the Following Statements About Financial Statement

Short Answer

Indicate whether each of the following statements about financial statement analysis is true or false.
_____ a)A common size income statement is prepared by converting each component to a percentage of net income.
_____ b)Common size financial statements are a form of vertical analysis,but the common size statements for two or more years may usefully be compared.
_____ c)Vertical analysis of a balance sheet involves converting each component to a percentage of stockholders' equity.
_____ d)Small percentage changes resulting from vertical analysis may still represent large dollar amounts;therefore,changes in both absolute dollar amounts and percentages should be examined.
_____ e)Vertical analysis of a company's balance sheet is useful in assessing its liquidity.