The correct answer is The ratio analysis is used to measure relations among the financial statement items.
The main financial statistics used to depict and encapsulate a company's present financial situation are called "key ratios." They are created by contrasting several financial statement line items for the subject. Key ratios are used by analysts and investors to compare companies to their peers. The return a firm makes on the capital of its owners, or return on equity, is one of the most crucial statistics to comprehend. It serves as a gauge of a company's efficiency in generating profit for its shareholders. When reviewing a company's financial accounts over a number of periods, horizontal analysis is utilized. The most common way to represent it is as a percentage increase over the identical line item in the base year.
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