If an Analyst Wishes to Compare Several Different Companies That

question 15

Multiple Choice

If an analyst wishes to compare several different companies that vary in size, which of the following types of financial statement analysis would be used?

• A)Horizontal analysis
• B)Common- size financial statement analysis
• C)Vertical analysis
• D)Ratio analysis

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Definitions:

Higher Total Output

Indicates an increased overall level of production or sum of goods and services produced within an economy.

Resource Endowments

The natural, human, and capital resources that a country or region possesses, determining its economic potential and development opportunities.

Technological Capabilities

Refers to the knowledge, equipment, and processes that an organization has at its disposal to develop new products or improve existing ones.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than its competitors.