Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:

Financial statement analysis provides the basis for various governmental actions except:

Options:

Fixing of prices

Controlling the corporate sector

Tax subsidy to the corporate sector

Maximizing shareholder dividends

Correct Answer:

Maximizing shareholder dividends

Explanation:

Financial statement analysis provides the basis for various governmental actions, and these actions often aim to regulate or influence the corporate sector and promote the overall welfare of the economy. However, maximizing shareholder dividends is not one of the typical governmental actions resulting from financial statement analysis. Dividend decisions are typically made by the company's management and board of directors based on the company's financial performance, cash flow, growth prospects, and other factors. While governments may create an environment conducive to business growth and profitability, they do not directly intervene to maximize shareholder dividends.