Match List-I with List-IIList-IList-II(A) Comparative Statements(I) It describes the significant relationship which exists between various items of a balance sheet and a statement of profit and loss of a firm.(B) Common Size Statements(III) 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.(C) Trend Analysis(II) It is a technique of studying the operational results and financial position over a series of years.(D) Ratio Analysis(IV) These are the statements showing the profitability and financial position of a firm for different periods of time.Choose the correct answer from the options given below:
- A(A) - (II), (B) - (III), (C) - (IV), (D) - (I)
- B(A) - (IV), (B) - (III), (C) - (II), (D) - (I)
- C(A) - (I), (B) - (II), (C) - (IV), (D) - (III)
- D(A) - (III), (B) - (IV), (C) - (I), (D) - (II)
Solution & Step-by-step Explanation
The correct matching definitions for financial analysis techniques are:(A) Comparative Statements (IV): Statements showing the financial metrics of a firm for different periods of time to facilitate comparison.(B) Common Size Statements (III): Statements indicating the relationship of components to a common base item by expressing them as percentages.(C) Trend Analysis (II): A technique used to observe operational results and direction over a series of sequential years.(D) Ratio Analysis (I): Mathematically describes the relationship existing between various items across statements.