BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Common size analysis is also known as ____ Analysis
A
Vertical
B
Horizontal
C
Parallel
D
None
Explanation: 

Detailed explanation-1: -Common size analysis, also referred as vertical analysis, is a tool that financial managers use to analyze financial statements. It evaluates financial statements by expressing each line item as a percentage of the base amount for that period.

Detailed explanation-2: -Common size income statement example This common size income statement analysis is done on both a vertical and horizontal basis.

Detailed explanation-3: -C) Vertical Analysis is also termed as dynamic analysis.

Detailed explanation-4: -Vertical analysis, which is also known as common-size analysis, is similar to horizontal analysis and can be performed on the same financial documents. However, financial analysts perform vertical analysis vertically inside of a column rather than horizontally across time periods.

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