Match List-I with List-II. LIST I LIST II (A) Comparative Statements…

Match List-I with List-II.

LIST I	LIST II
(A) Comparative Statements	(I) It describes the significant relationship which exists between various items of a balance sheet and a statement of profit and loss of a firm.
(B) Common Size Statements	(II) It is a technique of studying the operational results and financial position over a series of years
(C) Trend Analysis	(III) These are the statements which indicate the relationship of different items of a financial statement with a common item by expressing each item as a percentage of that common item.
(D) Ratio Analysis	(IV) These are the statements showing the profitability and financial position of a firm for different periods of time.

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → (A)-(IV), (B)-(III), (C)-(II), (D)-(I)

Each tool of financial analysis is known by what it compares: periods side by side, items against a common base, a series of years, or items against one another.

(A) Comparative Statements — this matches (IV) These are the statements showing the profitability and financial position of a firm for different periods of time. They place two or more periods side by side (horizontal analysis).

(B) Common Size Statements — this matches (III) These are the statements which indicate the relationship of different items of a financial statement with a common item by expressing each item as a percentage of that common item. Every item is shown as a percentage of one common base (vertical analysis).

(C) Trend Analysis — this matches (II) It is a technique of studying the operational results and financial position over a series of years. It follows items over several years against a base year.

(D) Ratio Analysis — this matches (I) It describes the significant relationship which exists between various items of a balance sheet and a statement of profit and loss of a firm. A ratio relates one item to another.

NCERT (2026-27 edition):
Tools of Analysis of Financial Statements – “… Comparative Statements: These are the statements showing the profitability and financial position of a firm for different periods of time in a comparative form to give an idea about the position of two or more periods.”

NCERT (2026-27 edition):
Tools of Analysis of Financial Statements – “… Common Size Statements: These are the statements which indicate the relationship of different items of a financial statement with a common item by expressing each item as a percentage of that common item.”

NCERT (2026-27 edition):
Tools of Analysis of Financial Statements – “… Trend Analysis: It is a technique of studying the operational results and financial position over a series of years.”

NCERT (2026-27 edition):
Tools of Analysis of Financial Statements – “… Ratio Analysis: It describes the significant relationship which exists between various items of a balance sheet and a statement of profit and loss of a firm.”