When a financial analyst determines the percentage change in operating income for a five-year period,which of the following is she performing?

Question

Quizplus · Accepted Answer

The analyst is performing a time series analysis by comparing the operating income data over a period of five years. Vertical analysis is used to determine the percentage of each component of a financial statement in relation to a base (such as total assets or total revenue). Profitability analysis involves assessing the company's profitability relative to competitors or industry benchmarks. Cross-sectional analysis involves comparing data from different companies or industries at a given point in time.

When a Financial Analyst Determines the Percentage Change in Operating