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Which of the following is not a tool or technique used by a financial statement analyst?

1) Random sampling analysis
2) Trend analysis
3) Industry comparisons
4) Common-size financial statement

1 Answer

4 votes

Final answer:

Random sampling analysis is not a tool or technique used by a financial statement analyst.

Trend analysis, industry comparisons,

and common-size financial statement analysis are commonly used in financial statement analysis.

Step-by-step explanation:

Out of the given options, random sampling analysis is not a tool or technique used by a financial statement analyst. Random sampling analysis is typically used in statistical analysis and research to gather data from a larger population, but it is not directly related to financial statement analysis.

On the other hand, trend analysis is a tool used by financial statement analysts to identify and analyze patterns and changes in financial data over time.

Industry comparisons is another technique used to benchmark a company's financial performance against its industry peers.

Common-size financial statement analysis involves expressing financial statement items as a percentage of a common base, enabling easier comparison between companies and over time.

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