Which of the Following Statements About Financial Statement Analysis Is

question 29

Multiple Choice

Which of the following statements about financial statement analysis is not true?

• A)In horizontal percentage analysis,an item from the financial statements is expressed as a percentage of the same item from a previous year's financial statements.
• B)Vertical analysis compares two or more financial statement items within the same time period.
• C)Horizontal analysis for several years can be done by choosing one year as a base year and calculating increases or decreases in relation to that year.
• D)The reason behind a financial statement ratio or percentage analysis result is usually self-evident and does not require further study or analysis.

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Definitions:

Replacement-Level Fertility Rate

The average number of children that must be born to a woman over her lifetime to exactly replace the population, without increasing or decreasing it.

Total Fertility Rate

The average number of children a woman would bear during her lifetime, given current birth rates.

Infant Mortality Rate

The number of deaths of infants under one year of age per 1,000 live births in a given year.

Replacement-Level Fertility

The average number of children that must be born to women of reproductive age in a population to replace the number of people dying, ensuring population stability.