Horizontal Analysis of Comparative Financial Statements Includes the

question 106

Multiple Choice

Horizontal analysis of comparative financial statements includes the

• A) development of common size statements.
• B) calculation of liquidity ratios.
• C) calculation of dollar amount and percentage changes from financial statements over a period of time, as compared to a base year.
• D) evaluation of financial statement data that expresses each item in a financial statement as a percentage of a base amount.

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Definitions:

Strip Bond

A debt security that has had its main components, namely the coupon and the principal, separated to be sold individually as zero-coupon bonds.

Maturity

The set date on which the principal amount of a financial instrument, such as a bond or loan, becomes due and payable.

Yield

The income return on an investment, such as the interest or dividends received, usually expressed as an annual percentage rate based on the investment's cost, its current market value, or its face value.

Canada Savings Bond

A secure investment instrument offered by the Canadian government, allowing citizens to lend money to the government with a guaranteed return.