Comparison of actual ratios of one period with those of earlier periods for the same enterprise is known as :

Time-series Analysis

The correct answer is option 3- Time-series Analysis.

Comparison of actual ratios of one period with those of earlier periods for the same enterprise is known as Time-series Analysis.

Financial statement analysis is a judgemental process that aims to estimate current and past financial positions and the results of the operation of an enterprise, with primary objective of determining the best possible estimates and predictions about the future conditions. It essentially involves regrouping and analysis of information provided by financial statements to establish relationships and throw light on the points of strengths and weaknesses of a business enterprise, which can be useful in decision-making involving comparison with other firms (cross-sectional analysis) and with firms’ own performance, over a time period (time series analysis).

• Cross-sectional Analysis: This type of analysis involves comparing different companies, industries, or segments at a specific point in time. Cross-sectional analysis helps in comparing company's performance or financial position against its peers.

• Inter-firm Analysis: Inter-firm analysis is a type of analysis that focuses on comparing the financial performance and position of different companies within the same industry. The goal is to assess how individual companies within the industry are performing relative to each other. It helps company management  to understand competitive dynamics and identify areas for improvement.

• Time-series Analysis: Time-series analysis involves studying the behavior of a single company over a period of time. Instead of comparing multiple entities at a single point in time, it focuses on observing and analyzing changes in performance over sequential time periods. It is commonly used by investors, analysts, and managers for forecasting, trend analysis, and strategic decision-making.