Question

    Which of the following are Financial Analysis Techniques?

    A Ratio analysis Correct Answer Incorrect Answer
    B Common-size analysis Correct Answer Incorrect Answer
    C Graphical Analysis Correct Answer Incorrect Answer
    D Regression Analysis Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    All the above-mentioned techniques are financial analysis techniques. ·         Ratio analysis is a quantitative analysis that helps in analysing the financial statements of a company to give a quick indication of the financial performance and financial position of the company in key areas like profitability, efficiency in use of its assets, solvency of the company and the liquidity position of the company. ·         Common size statements normalize balance sheets and income statements and allow the analyst to compare performance across firms and for a single firm overtime more easily. ·         Graphs can be used to visually present performance comparisons and composition of financial statement elements over time Regression Analysis can be used to identify relationships between variables. The results are often used for forecasting

    Practice Next