Accountancy Part BAnalysis of Financial Statements

Identify that tool of analysis of financial statements which is also…

Identify that tool of analysis of financial statements which is also known as 'Vertical Analysis'.

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → Common Size Statements

NCERT (2026-27 edition):
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):
Test your Understanding – I

Extract from the NCERT textbook

NCERT (2026-27 edition):
Answers to Test your Understanding

Extract from the NCERT textbook