An Index Measures the Current Value of a Group of Stocks

question 77

True/False

An index measures the current value of a group of stocks in relation to a base value established previously.

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Definitions:

Trend Analysis

A type of horizontal analysis that deals with percentage changes in items on the financial reports for several years. This analysis uses a base year to calculate the percentage change of each item.

Gross Profit

The financial metric representing the difference between revenue and the cost of goods sold, before accounting for other expenses.

Vertical Analysis

A financial statement analysis method where each entry for each of the three major categories of accounts (assets, liabilities, and equities) in a balance sheet is represented as a proportion of the total account.

Cost Of Goods Sold

Refers to the total expense directly related to the production of goods or services a company sells.