When a financial analyst determines the percentage change in operating income for the five-year period from 2011 to 2015, she is performing a
A)time series analysis.
B)vertical analysis.
C)profitability analysis.
D)cross-sectional analysis.

Question

Quizplus · Accepted Answer

Time series analysis involves analyzing data over a period of time to identify trends, patterns, and changes in performance indicators such as operating income. In this case, the financial analyst is calculating the percentage change in operating income over a five-year period to identify the trend and direction of the company's profitability. Vertical analysis involves analyzing the financial statements for a single period to determine the relative proportions of each line item. Profitability analysis involves assessing the profitability of a company based on various metrics such as return on investment, return on equity, and profit margins. Cross-sectional analysis involves comparing the financial performance of different companies within the same industry or sector.

When a Financial Analyst Determines the Percentage Change in Operating