61) It is generally considered more useful to know the absolute dollar amount of change in financial statement amounts from year to year than to know the percentage change.
62) The analysis of trend percentages is a form of vertical analysis.
63) The percentage change in financial statement balances is computed by dividing the dollar amount of the change from the base (earlier) period to the later period by the base-period amount.
64) Vertical analysis could be used to determine what is happening to cost of goods sold from one year to the next.
65) When performing vertical analysis of an income statement, net income is usually used as the base.
66) Vertical analysis highlights changes in an item on the financial statements over time.
67) When performing vertical analysis, each financial statement item is shown as a percentage of the base amount.
68) When performing vertical analysis on a balance, the current liabilities are compared typically to total liabilities.
69) When performing vertical analysis on a balance, share capital is calculated as a percentage of total shareholders’ equity.
70) When performing vertical analysis on a balance, long term debt is calculated as a percentage of total liabilities and shareholders’ equity.