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Question
Which of the following tools of ‘Analysis of Financial Statements’ indicate the trend and direction of financial position and operating results?
Options
Comparative Statement
Common size statements
Cash flow analysis
Ratio Analysis
MCQ
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Solution
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.
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