Question : Comparison of values of one period with those of another firm for the same period is known as –
Option 1: Intra-firm comparison.
Option 2: Inter-firm comparison
Option 3: Either 1 and 2
Option 4: None of the above
Correct Answer: Inter-firm comparison
Solution : Answer = Inter-firm comparison.
Comparing the financial performance of two or more businesses in the same industry is known as an inter-firm comparison. Comparing their financial statements—such as their cash flow, income, and balance sheets—will enable a firm to make a comparison. Hence, the correct option is 2.
Question : The objective of financial statement analysis is _______ comparison.
Question : When comparison is to compare a firm’s present ratios with its past ratios. When ratios of the same firm over a period of time are compared, it is known as the
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