Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:
What is called the analysis of the financial statements of two or more organizations?
Options:
Vertical Analysis
Intra-firm Analysis
Inter-firm Analysis
All of above
Correct Answer:
Inter-firm Analysis
Explanation:
The main aim of inter-firm comparison is to act as an incentive to increase productivity and efficiency of the organisation. It enables the management to challenge the standards set by the firms. It compares the performance with other firms in order to know the relative position of other organisations.