Element 10 10.3.1 Financial Analysis Quiz

What does horizontal analysis compare?

• Different companies' financials

• Financial data over multiple periods

• Financial data within the same period

• Industry benchmarks

Vertical analysis is also known as?

• Trend analysis

• Ratio analysis

• Common-size analysis

• Benchmarking

What does trend percentage analysis primarily focus on?

• Comparing companies

• Identifying financial ratios

• Tracking performance over time

• Calculating fixed assets

Which ratio is calculated as Current Assets divided by Current Liabilities?

• Profit Margin

• Debt Ratio

• Current Ratio

• Return on Equity

Benchmarking involves comparing a company's performance to what?

• Historical data

• Industry standards

• Competitors' data

• All of the above

In vertical analysis, how is each item on a financial statement expressed?

• As a percentage of a total figure

• As a fixed amount

• As a ratio

• As a trend percentage

What is the primary goal of ratio analysis?

• To determine profit margins

• To evaluate financial performance and position

• To calculate asset turnover

• To determine market share

The Debt-to-Equity ratio is used to evaluate what aspect of a company?

• Liquidity

• Profitability

• Financial leverage

What is a key advantage of using trend percentages?

• They simplify complex data

• They are easy to calculate

• They highlight changes over time

• They compare to industry benchmarks

What is the main purpose of horizontal analysis?

• To compare financial data within the same period

• To assess market trends

• To compare financial data over multiple periods

• To calculate ratios