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5.4: Longitudinal vs. Cross-sectional Analysis (Example)

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    Definitions:

      • Longitudinal:
        • Different times
        • Same company
        • Over time
      • Cross-sectional:
        • Same time
        • Different companies
        • Company-to-company

    In all instances the ratios presented will be the same.

    Exercise: Describe the longitudinal and cross-sectional relationships for the profitability ratios in the table below.

    5.1-spaces.png

    Description:

        • Both ABC and XYZ Corporations are more profitable now than then.
        • XYZ is more profitable both now and then than ABC.

    Financial Ratios Do Not Provide Answers

    Col. Jessup (Jack Nicholson): You want answers?
    Lt. Kaffee (Tom Cruise): I think I’m entitled to…
    Jessup: You want answers?
    Kaffee: I want the truth!
    Jessup: You can’t handle the truth!

    -A Few Good Men (1992)

    This page titled 5.4: Longitudinal vs. Cross-sectional Analysis (Example) was last modified on Fri, 19 Aug 2022 16:16:58 GMT and is shared under a CC BY 4.0 license and was authored, remixed, and/or curated by Kenneth S. Bigel via source content that was edited to the style and standards of the LibreTexts platform.