A financial technique that involves dividing various financial statement numbers into one another is called:
A) trend analysis
B) cross sectional analysis
C) ratio analysis
D) percent of sales analysis

Question

Quizplus · Accepted Answer

Ratio analysis is the financial technique that involves dividing various financial statement numbers into one another in order to evaluate a company's financial condition and performance. Trend analysis examines the change in financial statement numbers over time, cross-sectional analysis compares a company's financial ratios to those of its peers, and percent of sales analysis determines how much each expense and income item on a company's income statement contributes to sales revenue.

A Financial Technique That Involves Dividing Various Financial Statement Numbers