Select the incorrect statement regarding ratio analysis.
A) Ratio analysis is a specific form of horizontal analysis.
B) There are many different ratios available for evaluating a firm's performance.
C) Some ratios involve an account from the balance sheet and one from the income statement.
D) Ratio analysis involves making comparisons between different accounts in the same set of financial statements.

Question

Quizplus · Accepted Answer

Ratio analysis is not a specific form of horizontal analysis. Ratio analysis involves calculating and comparing various ratios using the accounts in the financial statements. Horizontal analysis involves comparing financial data over time, such as comparing this year's revenue to last year's revenue.

Select the Incorrect Statement Regarding Ratio Analysis