Which of the following statements regarding analysis of ratios is true?
A) A time-series analysis compares a company's financial results for one period to its own results in other periods.
B) If we compare a company's performance in the current period to its competitors' performance, we are conducting a time-series analysis.
C) Benchmarks are judges' seats.
D) Cross-sectional analysis refers to a ratio comparison across companies that are in different industries.

Question

Quizplus · Accepted Answer

A time-series analysis compares a company's financial results for one period to its own results in other periods. Option B is incorrect as comparing a company's performance in the current period to its competitors' performance is a cross-sectional analysis, not a time-series analysis. Option C is irrelevant as it does not pertain to the question. Option D is incorrect as cross-sectional analysis refers to a ratio comparison across companies that are in the same industry.

Which of the Following Statements Regarding Analysis of Ratios Is