Match the following:
| PURPOSE | TYPE OF FINANCIAL ANALYSIS |
| 1) Internal user | a) Employees |
| 2) External user | b) Government |
| 3) Time period of analysis | c) Short-term analysis |
| 4) Firm comparison | d) Inter firm comparison |
Answer & explanation
Correct answer: option 3
Users of final statements- External and internal analysis. Users can be internal like management, employees or external like government, creditors etc.
Time- Short-term and long-term analysis. Comparison can be done for a short-term or long-term period.
Firm- Intra-firm and inter-firm analysis. A firm would like to compare its performance with that of other firms and of industry in general. The comparison is called inter-firm comparison. If the performance of different units belonging to the same firm is to be compared, it is called intra-firm comparison.