A technique for evaluating financial statements that expresses the relationship among selected items of financial statement data is
A) common size analysis.
B) horizontal analysis.
C) ratio analysis.
D) vertical analysis.

Question

Quizplus · Accepted Answer

Ratio analysis expresses the relationships among selected items of financial statement data by calculating various ratios, such as liquidity ratios, profitability ratios, and leverage ratios. Common size, horizontal, and vertical analyses are techniques that present financial statement data in different ways, but they do not calculate ratios.

A Technique for Evaluating Financial Statements That Expresses the Relationship