The Type of Analysis Being Carried Out When a Company's

question 3

Multiple Choice

The type of analysis being carried out when a company's gross profit ratio for three years is graphed and compared with the average industry gross profit ratio calculated over the same time period is:

• A)parallel analysis.
• B)vertical analysis.
• C)trend analysis.
• D)gearing analysis.

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Definitions:

Fair Value Hedge

A hedging strategy used to protect against changes in the fair value of assets or liabilities.

Account Payable

The amount of money owed by a company to its creditors for goods or services that have been delivered or used, but not yet paid for.

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy an underlying asset at a specified price within a specific time period.

Cash Flow Hedge

A financial strategy to manage the risk of cash flow fluctuations due to changes in the value of underlying assets or liabilities.