Vertical analysis is also known asSelect one:a.Static analysisb.Structural analysisc.Cross-sectional analysisd.All of the above
Question
Vertical analysis is also known as
Select one:
- a. Static analysis
- b. Structural analysis
- c. Cross-sectional analysis
- d. All of the above
Solution
Break Down the Problem
- Identify the term "Vertical Analysis" and its alternative names.
- Evaluate the provided options to determine which best describes vertical analysis.
Relevant Concepts
Vertical analysis is a method of financial statement analysis that shows each item on a statement as a percentage of a base figure, typically used to analyze income statements and balance sheets.
Analysis and Detail
- Static Analysis: Typically refers to an analysis method that examines financial data at a particular point in time.
- Structural Analysis: While this may refer to analyzing the structure of financial statements, it is not commonly known as a term for vertical analysis.
- Cross-Sectional Analysis: This usually refers to comparing financial data across different entities at a single point in time, rather than within a single entity's financial statements.
- All of the Above: This option implies that each of the previous options could be correct for vertical analysis.
Verify and Summarize
Upon evaluating the definitions, vertical analysis does not fall into the categories of static or structural analysis, nor does it directly correlate to cross-sectional analysis. Therefore, the most accurate choice is to recognize that none of the individual options correctly define vertical analysis.
Final Answer
The correct answer is: None of the options accurately describe vertical analysis; however, if one must choose, (c) Cross-sectional analysis is the closest, but it is still not accurate.
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