a.
Concept Introduction:
Vertical Analysis: Vertical analysis is a method of representing each transaction as a proportion of the total account. It also refers to common size analysis which represents the percentage of each account shown in terms of a certain aggregate amount that is base.
To identify: The figures of each line item as a percentage of sales for both companies, the largest percentage of sales in 2019, and the way it changed from 2018 to 2019.
b.
Concept Introduction:
Vertical Analysis: Vertical analysis is a method of representing each transaction as a proportion of the total account. It also refers to common size analysis which represents the percentage of each account shown in terms of a certain aggregate amount that is the base amount.
To identify: The Company which is larger than others when sales are used as a measure of size.
c.
To identify: The Company which has a higher cost of goods sold relative to sales.
d.
To identify: The Company which has higher selling, general, and administration expenses relative to sales.
e.
To identify: The Company which has higher research and development expenses relative to sales.
f.
To identify: The Company which has higher income from continuing operations relative to sales.
g.
To identify: The Company which has a higher profit margin.

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Chapter 5 Solutions
Intermediate Accounting
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