Question : ---------- requires a financial statement of one period.
Option 1: Horizontal Analysis
Option 2: Vertical Analysis
Option 3: Both 1 and 2
Option 4: None of the above
Correct Answer: Vertical Analysis
Solution : Answer = Vertical Analysis
Vertical analysis, also known as common-size analysis, focuses on expressing each line item on a financial statement as a percentage of a base item within the same period. It provides insight into the relative proportion of each component and is conducted for a single period. Hence, the correct option is 2.
Question : Choose which of the following statements is correct?
Option 1: Horizontal Analysis requires financial statements of two or more accounting periods.
Option 2: Vertical Analysis requires financial statement of one period.
Question : …………. financial statement analysis is dynamic.
Option 1: Vertical analysis
Option 2: Horizontal analysis
Question : ------------ requires financial statements of two or more accounting periods.
Question : …………….. analysis of financial statement is based on one year data.
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