Question

Lynn, a company owner, looks at her financial statements. She wants to know how much the cash balance contributed to total assets on the balance sheet. What would you suggest

Answer 1

Answer:

conduct a vertical financial analysis using a total from the balance sheet

Explanation:

Based on what exactly Lynn wants, the best suggestion for her in this scenario would be to conduct a vertical financial analysis using a total from the balance sheet. This is a method of financial statement analysis in which each line item is listed as a percentage of a base figure within the statement. Doing so will give her the percentage that each asset contributed to the total balance sheet.