Accountancy Part BAnalysis of Financial Statements

The term Financial Analysis includes

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Both analysis and interpretation

NCERT (2026-27 edition):
Meaning of Analysis of Financial Statements – “… The term ‘financial analysis’ includes both ‘analysis and interpretation’. The term analysis means simplification of financial data by methodical classification given in the financial statements. Interpretation means explaining the meaning and significance of the data. These two are complimentary to each other.”