Practicing Success
Practicing Success
CUET Preparation Today
Which of the following is the importance of financial statement analysis for labour unions? |
To determine tax liabilities To check whether an enterprise can increase productivity or raise the prices of products to absorb a wage increase To assess whether an enterprise can increase wages Both 2 & 3 |
Both 2 & 3 |
The correct answer is option 4- Both 2 & 3. 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. 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. |
