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Using the Vertical Method to Analyze Financial Statements

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question 1 of 3

When an accountant calculates different parts of a financial statement in terms of a percentage of the total amount, the accountant is doing a _____.

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1. If a business has $100,000 in total assets, which includes $35,000 in cash, $10,000 in inventory, and $55,000 in accounts receivable, what is the vertical analysis of total assets?

2. Vertical analysis is typically performed on what financial statements?

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About This Quiz & Worksheet

Vertical analyses are one way of assessing the status of a company. Use this worksheet/quiz assessment to determine how well you understand the principle of vertical analyses and how to calculate them.

Quiz & Worksheet Goals

Use this worksheet/quiz to test your ability to:

  • Define the vocabulary that describes vertical methods of financial analyses
  • Calculate vertical analysis
  • Identify uses of vertical analysis

Skills Practiced

With this assessment individuals may test their skills in:

  • Critical thinking - apply relevant concepts to examine information about financial analyses in a different light
  • Problem solving - use acquired knowledge to solve practice problems about vertical analyses
  • Making connections - use your understanding of the concepts of vertical methods of financial analyses

Additional Learning

For a greater understanding of vertical analyses in business complete the lesson titled Using the Vertical Method to Analyze Financial Statements. In this lesson you will learn about:

  • The uses of balance sheets in vertical analysis
  • Components of vertical analysis
  • Uses of income statements in vertical analysis
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