Financial analysis is useful and important to different users. Which…

Financial analysis is useful and important to different users.

Which of the following is not the user of Financial analysis?

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → Non Competitive Firms

Financial analysis is used by those who must take a decision about the firm: its managers, its owners and investors, its lenders and trade creditors, labour unions and analysts. A firm that is not a competitor has no such decision to make, so it is not among the users.

Option (1) Finance manager — A user of financial analysis. He uses it to judge the firm’s strengths and weaknesses, control its finances and decide on funds.
Option (2) Top management — A user of financial analysis. It uses it to measure how well the firm’s operations and resources are being managed.
Option (3) Investors — A user of financial analysis. They use it to judge the firm’s earning capacity and the safety of their investment.

NCERT (2026-27 edition):
Significance of Analysis of Financial Statements – “… 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.”

NCERT (2026-27 edition):
Significance of Analysis of Financial Statements – “… Finance manager: Financial analysis focusses on the facts and relationships related to managerial performance, corporate efficiency, financial strengths and weaknesses and creditworthiness of the company.”

NCERT (2026-27 edition):
Significance of Analysis of Financial Statements – “… Top management: The importance of financial analysis is not limited to the finance manager alone.”

NCERT (2026-27 edition):
Significance of Analysis of Financial Statements – “… Investors: Investors, who have invested their money in the firm’s shares, are interested about the firm’s earnings.”