Accountancy Part BAnalysis of Financial Statements

Which analysis is a judgemental process which aims to estimate curren…

Which analysis is a judgemental process which aims to estimate current and past financial positions and the results of the operation of an enterprise, with primary objective of determining the best possible estimates and predictions about the future conditions?

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Financial statement analysis

NCERT (2026-27 edition):
Meaning of Analysis of Financial Statements – “… Financial statement analysis is a judgemental process which aims to estimate current and past financial positions and the results of the operation of an enterprise, with primary objective of determining the best possible estimates and predictions about the future conditions.”