Analysis of financial statement for single year is called as which type of analysis?
Answer & explanation
Correct answer: option 1
Vertical analysis, also known as common-size analysis, is a financial analysis technique used to assess the relative proportions of different items within a financial statement. It involves expressing each line item of a financial statement as a percentage of a common base amount. The purpose of vertical analysis is to identify the composition and significance of individual elements in relation to the total or the base amount.