Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:
Analysis of Financial Statements of two enterprises is called which of the following?
Options:
Horizontal Analysis
Vertical analysis
Cross sectional analysis
Time series analysis
Correct Answer:
Cross sectional analysis
Explanation:
Cross-sectional analysis is a financial analysis method used to compare different companies, projects, or investments at a specific point in time. Unlike time-series analysis, which examines the performance of a single company over multiple periods, cross-sectional analysis focuses on comparing similar items or metrics across different entities simultaneously.