Which of the following facts are related to the tools for analysis of financial statements:
A. Comparative statements and the financial ratios are the two tools employed in vertical analysis
B. Common size statements are the form of horizontal analysis
C. Cash flow statements is a tool of financial statements analysis
D. Ratio Analysis establishes the relationship between two financial Variables
E. In a common size statements, each item is expressed as a percentage of some common base Choose the correct answer from the options given below:
This question was previously asked in
Shift 31/05/2023 3:30 PM - 6:30 PM
A
A, B and C only
B
A and C only
C
C and D only
D
C, D and E only
Correct Answer
C, D and E only
Detailed Explanation
C. Cash flow statements are a tool of financial statements analysis - True. The cash flow statement is an important tool in financial statement analysis.
D. Ratio Analysis establishes the relationship between two financial variables - True. Ratio analysis establishes the relationship between various financial variables.
E. In a common size statement, each item is expressed as a percentage of some common base - True. In common size statements, each item is expressed as a percentage of a common base item.
So, statements C, D, and E are correct.
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