# What type of analysis is indicated by the following?

### Survey of Accounting (Accounting I)

8th Edition
Carl Warren
Publisher: Cengage Learning
ISBN: 9781305961883

### Survey of Accounting (Accounting I)

8th Edition
Carl Warren
Publisher: Cengage Learning
ISBN: 9781305961883

#### Solutions

Chapter
Section
Chapter 9, Problem 1SEQ
Textbook Problem

## What type of analysis is indicated by the following?

Expert Solution
To determine

Concept Introduction:

Vertical Analysis:

Vertical Analysis is used to analyze the % of items in statement for a particular period as the % of total amount. Vertical Analysis is done for particular period for different items. For example, analysis of '% of assets' as '% of Total assets' for a particular year is done using the Vertical analysis.

To Choose:

The option that states the type of analysis.

A. Vertical Analysis

### Explanation of Solution

The given analysis is a vertical analysis. Hence, correct option is A.

B. Horizontal analysis analyzes each row of the statement unlike the vertical analysis. Hence, it is not the correct option.

C. Profitability analysis analyzes only the profits and not the balance sheet items. Hence, it is not the correct option.

D. Contribution margin analysis does not apply to the balance sheet items. Hence, it is not the correct option.

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