Match List-I with List-IIList-IList-II(A) comparative statement(III) study the relationship between two or more years.(B) common size statement(IV) express each item as a percentage of the common base or item.(C) trend analysis(I) study the operational results over the series of years.(D) ratio analysis(II) express the relationship between various items of financial statement.Choose the correct answer from the options given below:
- A(A) - (I), (B) - (II), (C) - (III), (D) - (IV)
- B(A) - (I), (B) - (III), (C) - (II), (D) - (IV)
- C(A) - (I), (B) - (II), (C) - (IV), (D) - (III)
- D(A) - (III), (B) - (IV), (C) - (I), (D) - (II)
Solution & Step-by-step Explanation
Definitions of tools of financial analysis:(A) Comparative Statement: Compares financials horizontally between two or more years (III)(B) Common Size Statement: Vertical analysis where individual elements are converted to % of a common base line (IV)(C) Trend Analysis: Used to study operational directions over a long chronological series of multiple continuous years (I)(D) Ratio Analysis: Evaluates mathematical structural relationships between variables across statements (II)Matching sequence is (A) - (III), (B) - (IV), (C) - (I), (D) - (II).