Select the incorrect statement regarding ratio analysis.
A)Ratio analysis involves making comparisons between different accounts in the same set of financial statements.
B)There are many different ratios available for evaluating a firm's performance.
C)Some ratios involve an account from the balance sheet and one from the income statement.
D)Ratio analysis is a specific form of horizontal analysis.

Question

Quizplus · Accepted Answer

Ratio analysis is a form of vertical analysis, which involves comparing different items on a financial statement to a common base. Horizontal analysis, on the other hand, involves comparing financial data over time.

Select the Incorrect Statement Regarding Ratio Analysis