Indicate whether each of the following statements about financial statement analysis is true or false.________ a) The reason behind a financial statement ratio or percentage analysis result is usually self-evident and does not require further study or analysis.________ b) In horizontal percentage analysis, an item from the financial statements is expressed as a percentage of the same item from a previous year's financial statements.________ c) Horizontal analysis for several years can be done by choosing one year as a base year and calculating increases or decreases in relation to that year.________ d) One form of horizontal analysis is the preparation of common size financial statements.________ e) Vertical analysis compares two or more financial statement items within the same time
period.
What will be an ideal response?
a) F b) T c) T d) F e) T
a) The reason behind a financial statement ratio or percentage analysis result is not usually self-evident and requires further study or analysis.
b) In horizontal percentage analysis, an item from the financial statements is expressed as a percentage of the same item from a previous year's financial statements.
c) Horizontal analysis for several years can be done by choosing one year as a base year and calculating increases or decreases in relation to that year.
d) One form of vertical analysis is the preparation of common size financial statements.
e) Vertical analysis compares two or more financial statement items within the same time period.
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