Asked by Özge SA?IR on May 20, 2024
Verified
Which of the following statements is false?
A) When computing the component percentages for the income statement,net income is the base figure.
B) Time-series analysis examines a company's performance over time.
C) It is often useful to compare a company's performance with that of a competitor.
D) The North American Industry Classification System assigns industry codes based on business operations.
North American Industry Classification System
A standardized system used by Canada, Mexico, and the United States to classify businesses and industries for the purpose of collecting, analyzing, and publishing statistical data.
Component Percentages
A financial analysis tool that expresses each line item on a financial statement as a percentage of a base figure, allowing for comparability.
Time-Series Analysis
A statistical method that analyzes a sequence of data points, typically measured at successive times, to forecast future trends.
- Understand the method by which various financial ratios and their parts illustrate the financial soundness of a corporation.
- Differentiate between various types of financial analysis strategies and their purposes.
Verified Answer
CC
Charmine crews-laneMay 24, 2024
Final Answer :
A
Explanation :
When computing the component percentages for the income statement, revenue or net sales is usually used as the base figure, not net income.
Learning Objectives
- Understand the method by which various financial ratios and their parts illustrate the financial soundness of a corporation.
- Differentiate between various types of financial analysis strategies and their purposes.