CUET Preparation Today
Match the following regarding analysis of financial statement.
Choose the correct answer from the options given below. |
A-III, B-IV, C-II, D-I A-III, B-I, C-II, D-IV A-I, B-IV, C-II, D-III A-III, B-IV, C-I, D-II |
A-III, B-IV, C-I, D-II |
The correct answer is option 4- A-III, B-IV, C-I, D-II.
* Top management Significance- Firm’s financial condition is sound. Management of the firm would be interested in every aspect of the financial analysis. It is their overall responsibility to see that the resources of the firm are used most efficiently and that the firm’s financial condition is sound. Financial analysis helps the management in measuring the success of the company’s operations, appraising the individual’s performance and evaluating the system of internal control. * Trend analysis- It is a technique of studying the operational results and financial position over a series of years. Using the previous years’ data of a business enterprise, trend analysis can be done to observe the percentage changes over time in the selected data. The trend percentage is the percentage relationship, in which each item of different years bear to the same item in the base year. Trend analysis is important because, with its long run view, it may point to basic changes in the nature of the business. By looking at a trend in a particular ratio, one may find whether the ratio is falling, rising or remaining relatively constant. * Tools of analysis- Tools of Financial Analysis Commonly used tools of financial analysis are: Comparative statements, Common size statement, trend analysis, ratio analysis, and cash flow analysis. * Limitation- Some limitations of financial analysis are: |
