- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 3. Analyzing Balance Sheets
- Subject 5. Ratios and Common-Size Analysis
CFA Practice Question
A benchmark comparison is related to time-series analysis rather than cross-sectional analysis. True or False?
Correct Answer: False
Cross-sectional analysis always involves a comparison at a certain point in time. For example, one company's profitability may be evaluated against another company's profitability. A benchmark comparison measures a company's performance at a point in time against a standard.
User Contributed Comments 1
| User | Comment |
|---|---|
| studyprep | You freeze the time in Cross-sectional analysis. So you can not compare the same company financial with itself. You need at least two different companies' financials (which is a benchmarking), while keeping the time freezed up. |