Suppose in 20012 total equity and liabilities for a business amounted to $600,000 and total liabilities amounted
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Suppose in 20012 total equity and liabilities for a business amounted to $600,000 and total liabilities amounted to $400,000. The following year, total equity and liabilities increased to $700,000 while liabilities increased to $450,000. According to the vertical analysis method, has the financial situation become better or worse?
- Better because total equity reduced as a percentage of total equity and liabilities.
- Better because total liabilities increased faster than total equity and liabilities
- Better because the company was able to finance its operations with more debt
- Better because the total liabilities reduced as a percentage of total equity and liabilities.
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ISBN: 978-0133023893
7th edition
Authors: William Stallings, Tom Case
Posted Date: