A) In a vertical analysis of a balance sheet, each asset item is stated as a percent of total assets.
B) In a vertical analysis of an income statement, each item is stated as a percent of total expenses.
C) Vertical analysis may be prepared for several periods to analyze changes in relationships over time.
D) Major differences between a company's vertical analysis and industry averages should be investigated.

Vertical analysis is used to compare income statement accounts to net income as a percentage of net income.

Pready: Vertical analysis of income statement is based on net sales and not net income