Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:

Analysis of Financial Statements of two enterprises is called...................

Options:

Horizontal Analysis

Vertical analysis

Cross sectional analysis

Time series analysis

Correct Answer:

Cross sectional analysis

Explanation:

The correct answer is option 3- Cross sectional analysis.

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.