Vertical analysis compares each item on a financial statement with:a corresponding item on a different statement of the same year.B.a total or key amount on the same statement.an industry average.a total or key amount on the financial statement of the previous period.

The correct statement is b. a total or key amount on the same statement

Answered: sponding item on a diffe or key amount…

Business

Accounting

sponding item on a diffe or key amount on the sa ustry average.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 11MCQ

See similar textbooks

Related questions

Q: period cost shown in statement of financial position Ture or false

A: Period cost refers to the cost related to the passage of time. Since it is associated with the…

Q: What

A: Introduction:- The following one of the conditions is required to satisfied for segment reporting as…

Q: average collection period_

A: Average collection period = 365 * ((Accounts receivable, Opening + Accounts receivable,…

Q: calculate gross profit using FIFO and weighted average

A: FIFO and weighted average are methods of valuation of inventory. FIFO means First - in -First out,…

Q: Define days sales outstanding (DSO)

A: Days sales outstanding (DSO) It's a proportion of the normal number of days an organization should…

Q: TOTAL DM Variance,

A: Standard costing is used to determine the estimated expenses for the production process. In this…

Q: Which of the two methods of estamting uncollectable provides for the most accurate estimates of…

A: Allowance method It is a method for accounting bad debt expense, where uncollectible accounts…

Q: Define Average collection period.

A: Definition: Accounts receivable turnover: This is the ratio which analyzes the number of times…

Q: inventories at the lower of cost and net realizable value? Added to cost

A: "Since you have asked multiple question we will solve the first question for you. If you want any…

Q: Calculate Elon Mining Inc's current PD ration Calculate it's PB ratio Calcolate at PS ratio

A: PD Ratio: This ratio is computed from the ratio of price per share and dividend per share. PB Ratio:…

Q: Describe techniques of percentage analysis

A: Percentage analysis: It is a method to denotes raw streams of numbers as a percentage for well…

Q: ribution of ilding at a nventory f urth of the

A: Given: Gross pay =$954 Federal withholding =158 FICA withholding=46 Net pay=$750

Q: Find: a. The maintained markup in dollars and percentages. b. The gross margin in dollars and…

A: Formulas used: Maintained Mark up $ = Gross Margin$ - Cash Discounts +Alternations Gross Margin $ =…

Q: Using horizontal analysis, the increases and decreases are shown as O a. amounts for the highest…

A: The horizontal analysis is a method of reviewing the financial statement of the company for multiple…

Q: Compare standard quantity discounts to cumulative quantity discounts.

A: Cumulative Quantities Discount (CQD) is a system intended to recompense consumers after a definite…

Q: e total variance for production labor fo

A: Total variance for production labor = (Standard Rate * Standard Hours) – (Actual Rate * Actual…

Q: refers to the mean,

A: Mean means the average value in a collection of numbers. It is also known as the expected value.…

Q: (a) What are the percentage depletion and the cost depletion allowances?

A: Depletion: It refers to the process of proportionately distributing the cost of the extracting…

Q: Define average accumulated expenditures and explain how the amount is computed.

Q: Draw up a marginal statement that calculates the contribution per uni

A: Marginal costing seems to be a costing method whereby all variable expenses are included in the…

Q: differentiate and give illustrations of the difference between FIFO and Weighted Average.

A: Inventory Valuation - There are three method using which company can value their inventory a. FIFO…

Q: Which of the following is subtracted from weighted average EUP to derive FIFO EUP? a. beginning…

A: Introduction:- The following type of methods used to calculate ending inventory as follows:- FIFO…

Q: Prior (Past) service cost is expensed immediately using which of the following? a. U.S. GAAP. b.…

A: Prior or past service cost refers to the changes in the PV of defined benefit obligations due to the…

Q: Define seasonal effects on ratios

A: SOLUTION:- Seasonal factors can also distort a ratio analysis. For example inventory is very much…

Q: Thomas' direct-labor rate variance was:

A: Direct Labor rate Variance is the Variance for the difference between Actual rate and Standard Rate…

Q: c. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.…

A: Note 1: Under FIFO it is presumed sales are made from the earlier unit and under LIFO , it is from…

Q: ratios

A: Definition: Accounting Ratio: It means comparison between two or more financial elements used in…

Q: Weighted average method

A: Correct answer :- A :- Weighted average method.

Q: Compute for the returns, average of returns and Standard Deviation

A: Standard deviation is the variation in return from the mean value. Standard deviation =…

Q: How do I calculate the gross margin value under the FIFO, LIFO, and weighted average methods.

A: Gross Margin refers to the profit earned during an accounting period. Therefore, it is also called…

Q: Which method is required under GAAP? O All are acceptable methods O FIFO O LIFO O Average cost or…

A: GAAP means the generally accepted accounting principle which means that those accounting principle…

Q: Which of the following is the basic purpose of a responsibility accounting?a. variance analysisb.…

A: Definition: Responsibility accounting: The management of responsibility centers by the means of…

Q: it/ cost ratio is sis of governme ny people as p

A: Introduction : In a cost-benefit analysis, a benefit-cost ratio (BCR) is a ratio that summarises the…

Q: Balance of Deprec

A: A decrease in the value of an asset over a period of time / over a useful life is known as…

Q: Given the information, give the following ratio a. Average Collection period

A: Formula: Average collection period = Notes receivable / [ Net sales / 365 ]

Q: Using the current rate method, COGS is translated using a combination of historical and average…

A: COGS (Cost of goods sold) is just like sales, in the current rate method, and is translated to use…

Q: Determine total contra revenues for

A: 6. total contra revenue = sales allowance + sales discounts + sales return = 3500+18000+9000 = 30500

Q: How is the LIFO method used to calculate inventories? Is this permissible according to GAAP?

A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…

Q: What is a revenue variance and what does it mean?

Q: ases? or only in t

A: The explanation is given below ,

Q: Calculate F's basis for each asset received in the distribution.

Q: Compute for the returns, average of returns and Standard Deviation:

A: Returns Xi is the holding period return for stock prices. Xi= P1/P0 -1 Mean Xbar = ∑Xi/n Standard…

Q: ment is depre measured at

A: Given: A piece of equipment for a cost =$100,000 fair value=$82,000 Equipment assessed=$81,750

Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

Vertical analysis compares each item on a financial statement with:
a corresponding item on a different statement of the same year.
B.
a total or key amount on the same statement.
an industry average.
a total or key amount on the financial statement of the previous period.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What do the following data, taken from a comparative balance sheet, indicate about the companys ability to borrow additional long-term debt in the current year as compared to the preceding year?
ANALY SIS OF PROFITABILITY Based on the financial statement data in Exercise 24-1A, compute the following profitability measures for 20-2 (round all calculations to two decimal places): (a) Profit margin ratio (b) Return on assets (c) Return on common stockholders equity (d) Earnings per share of common stock
The income statement, statement of retained earnings, and balance sheet for Santiago Systems are as follows: Includes both state and federal taxes. Refer to the information for Santiago Systems above. Required: Note: Round answers to four decimal places. 1. Calculate the average common stockholders equity. 2. Calculate the return on stockholders equity.
When a change in accounting principle is made during the year, the cumulative effect on retained earnings is determined: a. during the year using the weighted average method b. as of the date of the change c. as of the beginning of the year in which the change is made d. as of the end of the year in which the change is made