Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:

Why trade unions are interested in analysis of financial statements?

Options:

To assess whether it can presently afford a wage increase

To pressurise the management for wage increase

Both 1 and 2

None of these

Correct Answer:

To assess whether it can presently afford a wage increase

Explanation:

Labour unions analyse the financial statements to assess whether it can presently afford a wage increase and whether it can absorb a wage increase through increased productivity or by raising the prices.