Which of the following compare(s) select items in financial statements by computing percentages, rates, and proportions?
A) profitability quotients
B) ratio analysis
C) vertical analysis
D) pro rata analysis

Question

Quizplus · Accepted Answer

Ratio analysis involves computing various financial ratios by comparing certain items in financial statements. It includes percentages, rates, and proportions, and is used to evaluate a company's financial performance and health. Option A, profitability quotient, refers to a specific type of ratio analysis that focuses on a company's profitability. Option C, vertical analysis, involves expressing each item in a financial statement as a percentage of a base item. Option D, pro rata analysis, is not a commonly used term in finance and accounting, and it is not clear what it refers to.

Which of the Following Compare(s) Select Items in Financial Statements