Quiz Financial Statement Analysis

It is also known as Trend Analysis

• Common-size

  analysis

• Horizontal analysis

• Ratio analysis

• Vertical Analysis

It is used to gain insights into a company’s liquidity, operational efficiency, and profitability.

• Horizontal analysis

• Common-size

  analysis

• Financial statement

  analysis

• Ratio analysis

It is equal to the amount in comparison year less amount in base year.

• Common-size

  analysis

• Financial statement

  analysis

• Horizontal analysis

• Horizontal analysis

  (monetary value)

It is another term used for

vertical analysis

• Common-size

  analysis

• Financial statement

  analysis

• Horizontal analysis

• Ratio analysis

It is making assessments and conclusions that meet the needs of stakeholders.

• Common-size

  analysis

• Financial statement

  analysis

• Horizontal analysis

• Ratio analysis

The horizontal analysis calculates the monetary and percentage changes from one year to another

• True

• False

An advantage of vertical analysis is that it contributes to understanding liquidity.

• True

• False

The common-size analysis relates line item values to a common base figure.

• True

• False

The horizontal analysis only uses absolute values to describe comparisons.

• True

• False

Horizontal analysis is valuable because it allows analysts to evaluate the company's current financial position, growth prospects, and past performance.

• True

• False