Indicate Whether Each of the Following Statements About Financial Statement

True/False

Indicate whether each of the following statements about financial statement analysis is true or false.________ a)Ratio analysis may involve studying relationships between an item reported on the balance sheet and another reported on the income statement.________ b)Comparing sales in Year 2 with sales for Year 1 is a form of vertical analysis.________ c)Comparing net income in Year 2 with sales for Year 2 is a form of horizontal analysis.________ d)Liquidity ratios measure a company's ability to generate cash flows in the short term.________ e)Working capital is calculated by using the following formula: current assets − current liabilities.