Question

State which of them are true?
A) When ratios of previous years are compared with current years, they are called trend ratios.
B) Trend percentages and trend ratios are used in static analysis.
C) Reliability of financial analysis depends upon the reliability of financial data.

• A. Both A and B
• B. Both A and C
• C. Both B and C
• D. A, B and C

Answer 1

The correct option is D A, B and C

Both and A and C are true.

A) When ratios of previous years are compared with current year, they are called as trend ratios. When same ratios of the current ratios are compared with previous year its known as trend ratios.

B) Trend percentages and trend ratios are used in trend analysis and not static analysis.

C) Reliability of financial analysis depends upon the reliability of financial data. Financial analysis is done from financial data hence, data should be correct for the analysis to be reliable.