Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Chapter 12, Problem 2QC
To determine
the primary focus of horizontal analysis
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In performing vertical analysis, we express each item in a financial statement as a percentage of a base amount. What base amount is commonly used for income statement accounts? For balance sheet accounts?
Expressing accounts receivable as a percentage of total assets is an example ofa. ratio analysis.b. vertical analysis.c. horizontal analysis.d. trend analysis.
Vertical analysis:
a. Is also known as common-size analysis
b. Is a technique for evaluating financial statement data that expresses each item in a financial statement as a percentage of a base amount
c. All of the above.
Chapter 12 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 12 - Prob. 1QCCh. 12 - Prob. 2QCCh. 12 - Prob. 3QCCh. 12 - Prob. 4QCCh. 12 - Expressing accounts receivable as a percentage of...Ch. 12 - Kincaid Company reported the following data (in...Ch. 12 - Prob. 7QCCh. 12 - Ratios that measure liquidity include all of the...Ch. 12 - Verba Corporation has an inventory turnover of 15...Ch. 12 - The measure of a companys ability to collect cash...
Ch. 12 - A ratio that measures a companys profitability is...Ch. 12 - Prob. 12QCCh. 12 - Prob. 13QCCh. 12 - Prob. 14QCCh. 12 - Prob. 12.1ECCh. 12 - Prob. 12.1SCh. 12 - Prob. 12.2SCh. 12 - Prob. 12.3SCh. 12 - Prob. 12.4SCh. 12 - Prob. 12.5SCh. 12 - (Learning Objective 4: Evaluate a companys quick...Ch. 12 - Prob. 12.7SCh. 12 - (Learning Objective 4: Measure ability to pay...Ch. 12 - (Learning Objective 4: Measure profitability using...Ch. 12 - Prob. 12.10SCh. 12 - (Learning Objective 4: Use ratio data to...Ch. 12 - Prob. 12.12SCh. 12 - (Learning Objective 4: Analyze a company based on...Ch. 12 - Prob. 12.14SCh. 12 - Prob. 12.15SCh. 12 - Prob. 12.16AECh. 12 - Prob. 12.17AECh. 12 - Prob. 12.18AECh. 12 - Prob. 12.19AECh. 12 - Prob. 12.20AECh. 12 - Prob. 12.21AECh. 12 - Prob. 12.22AECh. 12 - Prob. 12.23AECh. 12 - Prob. 12.24AECh. 12 - Prob. 12.25AECh. 12 - Prob. 12.26AECh. 12 - Prob. 12.27BECh. 12 - Prob. 12.28BECh. 12 - Prob. 12.29BECh. 12 - Prob. 12.30BECh. 12 - Prob. 12.31BECh. 12 - LO 4 (Learning Objective 4: Calculate ratios;...Ch. 12 - Prob. 12.33BECh. 12 - Prob. 12.34BECh. 12 - Prob. 12.35BECh. 12 - Prob. 12.36BECh. 12 - Prob. 12.37BECh. 12 - Prob. 12.38QCh. 12 - Prob. 12.39QCh. 12 - Prob. 12.40QCh. 12 - Prob. 12.41QCh. 12 - Prob. 12.42QCh. 12 - Prob. 12.43QCh. 12 - Prob. 12.44QCh. 12 - Use the Orlando Medical Corporation financial...Ch. 12 - Prob. 12.46QCh. 12 - Use the Orlando Medical Corporation financial...Ch. 12 - Prob. 12.48QCh. 12 - Prob. 12.49QCh. 12 - Prob. 12.50QCh. 12 - Prob. 12.51QCh. 12 - Prob. 12.52QCh. 12 - Prob. 12.53QCh. 12 - Prob. 12.54QCh. 12 - Prob. 12.55QCh. 12 - LO 1, 2, 4 (Learning Objectives 1, 2, 4: Calculate...Ch. 12 - Prob. 12.57APCh. 12 - Prob. 12.58APCh. 12 - LO 4 (Learning Objective 4: Use ratios to evaluate...Ch. 12 - Prob. 12.60APCh. 12 - LO 2, 4, 5 (Learning Objectives 2, 4, 5: Analyze...Ch. 12 - Group B LO 1, 2, 4 (Learning Objectives 1, 2, 4:...Ch. 12 - Prob. 12.63BPCh. 12 - Prob. 12.64BPCh. 12 - LO 4 (Learning Objective 4: Use ratios to evaluate...Ch. 12 - Prob. 12.66BPCh. 12 - LO 2, 4, 5 (Learning Objectives 2, 4, 5: Analyze...Ch. 12 - Prob. 12.68CEPCh. 12 - Prob. 12.69CEPCh. 12 - (Learning Objectives 2, 3.4: Use trend...Ch. 12 - (Learning Objectives 4, 5: Calculate and analyze...Ch. 12 - Prob. 12.72DCCh. 12 - Prob. 12.73DCCh. 12 - Prob. 12.74EICCh. 12 - Focus on Financials Apple Inc. LO 1, 2, 3, 4, 5...Ch. 12 - Comprehensive Financial Statement Analysis Project...
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Similar questions
- How is a financial ratio analysis performed? Comparing two items in financial statements. Evaluating the balance sheet Assessing the income statementarrow_forwardis the statement which indicates the relationship of different items of financial statement with some common item by expressing each item as a percentage of such common item a. Comparative statement b. Ratio statement c. Common size statement d. Trend Analysisarrow_forwardExplain why ratios that compare an income statement account with a balance sheet account should express the balance sheet account as an average of the beginning and ending balances.arrow_forward
- Which of the following would not be found on a single-step income statement? Revenues. Gross profit. Expenses. Net income.arrow_forwardWhich of the following is true about a common size balance sheet? The assets, liabilities, and equities are reported at their market values. The assets, liabilities, and equities are reported as percentages of common stock. The assets, liabilities, and equities are reported as percentages of total assets. O The assets, liabilities, and equities are arranged in the alphabetical order. The assets, liabilities, and equities are reported as percentages of the assets, liabilities, and equities of a competing firm.arrow_forwardThe following are the typical classifications used in a balance sheet: Current assets b. Investments c. Property, plant, and equipment d. Intangible assets e. other assets f. Current liabilities g. Long-term liabilities h. Paid-in capital i. Retained earnings a. Required: For each of the following balance sheet items, use the letters above to indicate the appropriate classification category. (If the item is a contra account, select the appropriate letter with a minus sign.) 1. C Equipment 10. ſa Inventory ces 2. t Accounts payable 11. Patent 3. lа Allowance for uncollectible accounts Land (used in operations) a 12. 4. b Land (held for investment) 13. Accrued liabilities (due in 6 months) 5. g Notes payable (due in 5 years) 14. Prepaid rent (for the next 9 months) 6. Deferred revenue (for the next 12 months) 15. h Common stock 7. f Notes payable (due in 6 months) 16. Building (used in operations) 8. i vAccumulated amount of net income less dividends 17. a Cash 9. b Investment in XYZ…arrow_forward
- When performing vertical analysis of a balance sheet, the base amount is ________. A gross profit B total cash and cash equivalents C net income D total assetsarrow_forwardDefine these. a. Return on equityb. Total assets turnoverc. Return on assetsd. Current ratioe. Receivables turnoverarrow_forwardIn a common size statement, the balance sheet may be expressed as a percentage of ___________ while the income statement may be expressed as a percentage of ___________. In a common size statement, the balance sheet may be expressed as a percentage of ___________ while the income statement may be expressed as a percentage of ___________. total assets; sales total assets; net income equity; sales liabilities; net incomearrow_forward
- Suppose that you are doing a financial statement analysis. Assume you took a financial statement and divided every entry amount in the statement by the amount of total assets. The resulting statement is commonly called a? current ratio common base year income statement common size balance sheet common size income statement common base year balance sheet .DO NOT GIVE PLAGRIZED ANSWERarrow_forwardThe percentage analysis of increases and decreases in related items in comparative financial statements is called _____.arrow_forwardWhat differentiates things reported on the income statement from those reported on the balance sheet on a fundamental level?arrow_forward
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