A technique for using information from financial statements to formulate specific values to determine some measure of a company's financial position is called ________ analysis.
A)horizontal
B)vertical
C)time-series
D)ratio

Question

Quizplus · Accepted Answer

Ratio analysis involves using financial ratios, such as liquidity ratios and profitability ratios, to analyze a company's financial position. Horizontal analysis involves comparing financial data over multiple periods. Vertical analysis involves analyzing a company's financial statements by expressing each item as a percentage of a base amount. Time-series analysis involves analyzing data over a period of time to identify trends and patterns. Of these options, only ratio analysis involves using financial ratios to determine a company's financial position.

A Technique for Using Information from Financial Statements to Formulate