Question

The tool of analysis of financial statements which indicates the trend and direction of financial position and operating results is ______.

Options

• Comparative Statements

• Common Size Statements

• Cash Flow Analysis

• Ratio Analysis

Answer 1

The tool of analysis of financial statements, which indicates the trend and direction of financial position and operating results, is comparative statements.

Explanation:

Comparative figures indicate the direction, trend, financial position, and operating performance. Comparative Statement Analysis is also referred to as horizontal analysis.