72.

Vertical analysis:

A.	identifies the relative contribution made by each financial statement line item.

B.	identifies trends over time.

C.	provides an understanding of the relationships among various items on financial statements by expressing the differences in terms of dollars.

D.	involves comparing amounts across different financial statements.

73.

Horizontal analysis:

A.	is used to identify trends over time.

B.	identifies the relative contribution made by each financial statement line item.

C.	provides an understanding of the relationships among various items on financial statements.

D.	involves comparing amounts across different financial statements.

74.

To analyze changes in a company's sales over the last five years, you should perform:

A.	vertical analysis.

B.	ratio analysis.

C.	horizontal analysis.

D.	cross-sectional analysis.

75.

Ratio analysis:

A.	is required by GAAP as part of every companys income statement and balance sheet.

B.	will always identify the best investment decision .

C.	will tell you how a company will perform in the future.

D.	allows you to evaluate how well a company has performed relative to other different-sized companies within the same industry.

76.

Which income statement line item had the largest percentage increase from the prior year to the current year?

	Current Year	Prior Year
Sales	$120,000	$100,000
Cost of Goods Sold	80,000	60,000
Depreciation Expense	30,000	20,000
Interest Expense	2,000	5,000

A.	Depreciation Expense

B.	Cost of Goods Sold

C.	Interest Expense

D.

Sales