Financial statement analysis involves forms of comparison including:
A)Comparing changes in the same item over a number of periods.
B)Comparing key relationships within the same year.
C)Comparing key items to industry averages.
D)All of these answers are correct.

Question

Quizplus · Accepted Answer

All of the given choices are forms of comparison used in financial statement analysis. Comparing changes in the same item over a number of periods (choice A) can show trends and patterns, while comparing key relationships within the same year (choice B) can reveal the company's financial health in the current year. Comparing key items to industry averages (choice C) can provide context and benchmarks for evaluating the company's performance. Therefore, all choices are appropriate for financial statement analysis.

Financial Statement Analysis Involves Forms of Comparison Including