Answer the following statements true (T) or false (F)
1. In a vertical analysis of the balance sheet, each line item is shown as a percentage of stockholders'
equity.
2. Vertical analysis involves comparing an amount for a line item in the financial statements with a
corresponding amount for the line item of the previous year.
3. In a vertical analysis of the income statement, each line item is shown as a percentage of net income.
4. Martin Company's cost of goods sold is 40% of net sales revenue. This means that for every $1 of net
sales revenue, Martin has $0.60 of gross profit.
5. In 2018, Spirit Company's net income was 10% of net sales revenue. In 2019, the net income was 5%
of net sales revenue. There is no need for investors to be alarmed because a drop from 10% to 5% is not
significant.
1. FALSE
2. FALSE
3. FALSE
4. TRUE
5. FALSE
You might also like to view...
Cash equivalents are investments that are readily converted to known amounts of cash and mature within three months.
Answer the following statement true (T) or false (F)
On March 1, 2016, LeBlanc, Inc. paid $60,000 for office rent covering the three-month period ending May 31, 2016. Journalize the adjusting entry on March 31 by using the alternative treatment of deferred expenses
What will be an ideal response
The articles of incorporation are specific in meaning, whereas the bylaws are general in meaning
Indicate whether the statement is true or false.
Strategic planning is a customer-facing business process.
a. true b. false