Analysis of the financial statement of an enterprise over a period of time
is known as:
Answer & explanation
Correct answer: option 2
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).