Question

Which of the following tools of ‘Analysis of Financial Statements’ indicate the trend and direction of financial position and operating results?

पर्याय

• Comparative Statement

• Common size statements

• Cash flow analysis

• Ratio Analysis

Answer 1

Comparative Statement

Explanation:

Comparative statements place the figures of two or more years side-by-side to calculate the actual increase or decrease in numbers and percentages. This side-by-side horizontal comparison directly helps a company see the upward or downward trend of its profits and financial growth over time.