Question Details

Liquidity ratios measure the ability of the enterprise 


TRUE-FALSE STATEMENTS
1. In the vertical analysis of a balance sheet, the base for current liabilities is total liabilities.
2. Vertical analysis is useful in making comparisons of companies of different sizes.
3. Using vertical analysis of the income statement, a company's net income as a percentage
Test Bank for Managerial Accounting, Second Edition
of net sales is 15%; therefore, the cost of goods sold as a percentage of sales must be
85%.
4. In the vertical analysis of an income statement, each item is generally stated as a
percentage of net income.
5. Liquidity ratios measure the ability of the enterprise to survive over a long period of time.



Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help