If you wish to examine the relationships among various items reported in one or more of the financial statements,you are most likely to use:
A)time-series analysis.
B)ratio analysis.
C)horizontal analysis.
D)cross-sectional analysis.

Question

Quizplus · Accepted Answer

Ratio analysis is the best choice to examine the relationships among various items reported in one or more of the financial statements. Ratio analysis involves the calculation of various financial ratios that help to evaluate the company's performance and financial position. These ratios can help to identify trends and relationships in the financial statements and provide insights into the company's liquidity, profitability, efficiency, and solvency. Time-series analysis involves the comparison of financial data over time, horizontal analysis involves the comparison of financial data for a single period, and cross-sectional analysis involves the comparison of financial data between different companies or industries. While these methods can also provide useful information, they are not as effective for examining relationships among items within a single company's financial statements.

If You Wish to Examine the Relationships Among Various Items