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Answer: 25%.
**Explanation:** Vertical common-size analysis involves expressing each balance sheet item as a percentage of total assets. The correct calculation for cash and cash equivalents is: \[ \text{Cash and cash equivalents} / \text{Total assets} = 40 / (125 + 35) = 40 / 160 = 25\% \] - **Option A (20%)** is incorrect because it mistakenly uses revenue as the denominator instead of total assets. - **Option C (32%)** is incorrect because it uses total current assets as the denominator instead of total assets. The correct answer is **B (25%)**, as it accurately reflects the proportion of cash and cash equivalents relative to total assets.
Author: LeetQuiz Editorial Team
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An analyst gathers the following information (in € millions) about a company: Cash and cash equivalents 40, Total current assets 125, Total non-current assets 35, Revenue 200. Using vertical common-size analysis, what percentage of total assets do cash and cash equivalents represent?
A
20%.
B
25%.
C
32%.
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