Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:

Financial analysis of a company includes:

Options:

Analysis

Interpretation

Both of these

None of these

Correct Answer:

Both of these

Explanation:

Option 1- Analysis
Option 2- Interpretation
The term ‘financial analysis’ includes both ‘analysis and interpretation’. The term analysis means simplification of financial data by methodical classification given in the financial statements. Interpretation means explaining the meaning and significance of the data.