Match List-I with List-II:List-IList-II(A) Comparative Statements(I) These are the statements which indicate the relationship of different items of a financial statement with a common item by expressing each item as a percentage of that common item.(B) Common Size Statements(II) It is a technique of studying the operational results and financial position over a series of years.(C) Trend Analysis(III) It describes the significant relationship which exists between various items of a balance sheet and a statement of profit and loss of a firm.(D) Ratio Analysis(IV) These are the statements showing the profitability and financial position of a firm for different periods of time in a comparative form to give an idea about the position of two or more periods.Choose the correct answer from the options given below:
- A(A) - (II), (B) - (III), (C) - (I), (D) - (IV)
- B(A) - (IV), (B) - (I), (C) - (II), (D) - (III)
- C(A) - (I), (B) - (II), (C) - (IV), (D) - (III)
- D(A) - (III), (B) - (IV), (C) - (I), (D) - (II)
Solution & Step-by-step Explanation
Matching financial analysis tools with descriptions:Comparative Statements: Contrast financial values across two or more periods side-by-side (Horizontal analysis). Matches with (IV).Common Size Statements: Reduce balances to percentages of a single base figure (like Net Sales or Total Assets) within a single year. Matches with (I).Trend Analysis: Investigates mathematical changes across sequential financial years relative to a selected base index year. Matches with (II).Ratio Analysis: Arithmetic connections drawing meaning between disparate line metrics across financial state structures. Matches with (III).Hence, the matching sequence corresponds to (A) - (IV), (B) - (I), (C) - (II), (D) - (III).