Practicing Success
There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below. Assertion (A): Financial Statement Analysis is undertaken by investors, lenders, and creditors for assessing the safety of an amount invested in the company. |
Both, Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of the Assertion. Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion. Assertion (A) is correct but the Reason (R) is not correct. Both Assertion (A) & Reason (R) are not correct. |
Both, Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of the Assertion. |
Financial analysis is the process of identifying the financial strengths and weaknesses of the firm by properly establishing relationships between the various items of the balance sheet and the statement of profit and loss. Financial analysis can be undertaken by management of the firm, or by parties outside the firm, viz., owners, trade creditors, lenders, investors, labour unions, analysts and others. The nature of analysis will differ depending on the purpose of the analyst. A technique frequently used by an analyst need not necessarily serve the purpose of other analysts because of the difference in the interests of the analysts. |