Analysis of the financial statement of an enterprise over other similar firms is known as:
Answer & explanation
Correct answer: option 3
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).