Which of the following statements regarding ratio analysis is incorrect?
A) Ratio analysis is a specific form of horizontal analysis.
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 involves making comparisons between different accounts in the same set of financial statements.

Question

Quizplus · Accepted Answer

Ratio analysis is not a specific form of horizontal analysis. It involves making comparisons between different accounts in the same set of financial statements, regardless of whether they are presented horizontally or vertically.

Which of the Following Statements Regarding Ratio Analysis Is Incorrect