Match List-I with List-II

List-I	List-II
(A) Comparative statements	(I) Operating Activities
(B) Common Size Statement	(II) Horizontal Analysis
(C) Cash flow Analysis	(III) Debt Equity Ratio
(D) Ratio Analysis	(IV) Vertical Analysis

Choose the correct answer from the options given below:

1. (A) - (II), (B) - (IV), (C) - (I), (D) - (III)
2. (A) - (IV), (B) - (II), (C) - (I), (D) - (III)
3. (A) - (II), (B) - (III), (C) - (IV), (D) - (I)
4. (A) - (III), (B) - (IV), (C) - (I), (D) - (II)

(A) Comparative Statements → (II) Horizontal Analysis

Comparative statements present financial data for two or more periods side by side. This allows analysis of changes across different time periods (year-on-year comparison). Since the comparison moves horizontally across time, this technique is called Horizontal Analysis.

(B) Common Size Statement → (IV) Vertical Analysis

Common size statements express each item as a percentage of a common base figure within the same period. For instance, in the Income Statement, each item is shown as a percentage of revenue, while in the Balance Sheet, each item is expressed as a percentage of total assets. Since all items are analyzed vertically within one period, this is called Vertical Analysis.

(C) Cash Flow Analysis → (I) Operating Activities

Cash flow analysis examines cash inflows and outflows through the Cash Flow Statement. The statement is divided into three categories: Operating Activities, Investing Activities, and Financing Activities. Operating Activities is the primary component that shows cash generated from core business operations.

(D) Ratio Analysis → (III) Debt Equity Ratio

Ratio analysis involves computing various financial ratios to assess performance, liquidity, solvency, and profitability. Debt Equity Ratio is one such important ratio that measures the relationship between external borrowings and shareholders' funds, indicating the company's financial leverage.

The correct matching is (A) - (II), (B) - (IV), (C) - (I), (D) - (III).

Correct Answer: Option 1