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    Question

    Which analysis involves the comparison between the

    current and historical financial performance and the evaluation of developing trends.
    A Time-series Correct Answer Incorrect Answer
    B Cross-sectional Correct Answer Incorrect Answer
    C Marginal Correct Answer Incorrect Answer
    D Quantitative Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    When the ratios of the same firm over a period of time are compared, it is known as the time series analysis (or trend analysis). Such an analysis gives an indication of the direction of change or developing trends and reflects whether a firm’s financial performance has improved, deteriorated, or remained constant over a period of time.

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