Question

When financial statements of two or more organisations are analysed, it is called:

• A. Intra-firm analysis
• B. Inter-firm analysis
• C. Vertical analysis
• D. None of these

Hint:

Remember: “Intra = within one firm”; “Inter = between firms”.

Answer 1

The Correct Option is B

Step 1: Define intra-firm vs inter-firm.
- Intra-firm analysis: Comparison within the same firm over time.
- Inter-firm analysis: Comparison between two or more firms in the same industry.
Step 2: Vertical analysis.
Vertical analysis refers to analysing financial statements by expressing each item as a percentage of a base figure (e.g., sales).
Step 3: Conclude.
Since the question specifies analysis of two or more organisations, the correct answer is Inter-firm analysis.
Final Answer: \[ \boxed{\text{Inter-firm analysis}} \]