6

Three of the most common tools of financial analysis are:

Multiple Choice

• Financial reporting, ratio analysis, vertical analysis.

• Ratio analysis, horizontal analysis, financial reporting.

• Horizontal analysis, vertical analysis, ratio analysis.

• Trend analysis, financial reporting, ratio analysis.

• Vertical analysis, political analysis, horizontal analysis.

7

The comparison of a company's financial condition and performance across time is known as:

Multiple Choice

• Horizontal analysis.

• Vertical analysis.

• Political analysis.

• Financial reporting.

• Investment analysis.

8

The measurement of key relations among financial statement items is known as:

Multiple Choice

• Financial reporting.

• Horizontal analysis.

• Investment analysis.

• Ratio analysis.

• Risk analysis.

9

Horizontal analysis:

Multiple Choice

• Is a method used to evaluate changes in financial data across time.

• Is also called vertical analysis.

• Is the presentation of financial ratios.

• Is a tool used to evaluate financial statement items relative to industry statistics.

• Evaluates financial data across industries.

10

The dollar change for a comparative financial statement item is calculated by:

Multiple Choice

• Subtracting the analysis period amount from the base period amount.

• Subtracting the base period amount from the analysis period amount.

• Subtracting the analysis period amount from the base period amount, dividing the result by the base period amount, then multiplying that amount by 100.

• Subtracting the base period amount from the analysis period amount, dividing the result by the base period amount, then multiplying that amount by 100.

• Subtracting the base period amount from the analysis amount, then dividing the result by the base amount.