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    Question

    Which type of analysis involves comparing the financial

    ratios of different firms at the same point in time?
    A Time-series Correct Answer Incorrect Answer
    B Cross-sectional Correct Answer Incorrect Answer
    C Marginal Correct Answer Incorrect Answer
    D Quantitative Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Cross-sectional analysis involves the comparison of a firm’s ratios with that of some other selected firms in the same industry or the industry average at the same point of time. Such a comparison is very helpful in assessing the relative financial position and performance of the firm.

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