Answer :
Option B is the correct answer. A vertical analysis allows for the comparison of financial statement items between companies of different sizes.
What is a vertical analysis?
- Vertical investigation may be a strategy for dissecting budgetary explanations when each line thing is recorded as a rate of a base amount.
- An income statement with a common size is one in which, to facilitate analysis, each line item is expressed as a percentage of sales.
What is difference between vertical and horizontal?
- Horizontal analysis contrasts a specific financial statement with other periods or the cross-sectional examination of one company against another company, whereas vertical analysis analyses a specific financial statement using only one base financial statement of the reporting period.
Option B is the correct answer. A vertical approach allows for the comparison of financial statement items between companies of different sizes.
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