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Question
Consider the following statements given below:
- In Common-size Balance Sheet, each item is converted into the percentage of share capital.
- In Common-size Statement of Profit and Loss, each item is converted into the percentage of total expenses.
- In Comparative Statement of Profit and Loss, absolute and percentage change in the items during two periods of time are calculated.
Choose the correct option:
Options
Only (I) is correct
Only (II) is correct
Only (III) is correct
All are correct
MCQ
Solution
Only (III) is correct
Explanation:
Comparative statements analyze financial data from two points in time to draw relevant inferences about changes in financial condition and operating results.
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Tools of Analysis of Financial Statements
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