Three of the most common tools of financial analysis are:
A) Financial reporting, ratio analysis, vertical analysis.
B) Ratio analysis, horizontal analysis, financial reporting.
C) Horizontal analysis, vertical analysis, ratio analysis.
D) Trend analysis, financial reporting, ratio analysis.
E) Vertical analysis, political analysis, horizontal analysis.

Question

Quizplus · Accepted Answer

The three most common tools of financial analysis are horizontal analysis, vertical analysis, and ratio analysis. Horizontal analysis involves comparing financial data over a certain period, while vertical analysis involves comparing financial data within a single period. Ratio analysis involves calculating and analyzing financial ratios (such as liquidity ratios or profitability ratios) to gain insight into a company's financial performance. Financial reporting is not a tool of financial analysis, but rather a source of data for these tools. Political analysis is not a tool of financial analysis, and trend analysis is not one of the three most common tools.

Three of the Most Common Tools of Financial Analysis Are