Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:

What does financial statement analysis of a company help economists judge regarding economic power?

Options:

The impact of government regulations on the corporate sector

The pitfalls in financial policies

The concentration of economic power in various firms

Both options 2 and 3

Correct Answer:

Both options 2 and 3

Explanation:

Option 1-The impact of government regulations on the corporate sector
Option 2-The pitfalls in financial policies
Option 3-The concentration of economic power in various firms
 Financial statement analysis is valuable for economists in assessing both the pitfalls in financial policies and the concentration of economic power among firms. These insights help economists form a comprehensive understanding of the overall economic landscape and identify areas that may require regulatory intervention or policy adjustments.