Final answer:
True. Tools used in financial statement analysis include common-size financial statements, key financial ratios, trend analysis, structural analysis, and comparison with industry competitors.
Step-by-step explanation:
True, the tools used in financial statement analysis should indeed include common-size financial statements, key financial ratios, trend analysis, structural analysis, and comparison with industry competitors. These tools are essential for understanding a company's financial health and performance over time. They allow analysts to make comparisons across companies in the same industry and track performance trends within a company. For instance, common-size financial statements express each line item as a percentage of a base figure, facilitating comparison between companies of different sizes. Key financial ratios, such as liquidity ratios, profitability ratios, and leverage ratios, give insight into various aspects of a company's financial sustainability and operational efficiency. Trend analysis looks at data points over time to identify patterns, while structural analysis helps in understanding the impact of specific factors on a company's financials. Lastly, comparing a firm's performance with industry competitors can highlight strengths and weaknesses in the context of the market.