Financial Statements

Analysis

Easy

Financial Statements

Which of the following is not a limitation of financial analysis?

Financial analysis does not consider price level changes.

Non-monetary aspects are ignored in financial analysis.

Financial analysis discloses the tax irregularities.

Financial analysis may be misleading without knowledge of the changes in accounting procedure.

✅ Correct Option: 3

Ignoring price level changes, ignoring qualitative or non-monetary factors, and being distorted by changes in accounting policy are all recognised limitations. Disclosing tax irregularities is a benefit of analysis, since it helps assess tax liability, so it is not a limitation.

2026: 21 May Shift 2

From the following information, ascertain the percentage change in profit after tax

Particulars	2024-25	2025-26
Profit before tax	7,50,000	15,60,000
Income Tax	30%	40%

2025: 15 May Shift 1

Which analysis is a judgemental process which aims to estimate current and past financial positions and the results of the operation of an enterprise, with primary objective of determining the best possible estimates and predictions about the future conditions?

2025: 15 May Shift 2

Percentage change in cash and cash equivalents

2023: 20 June Shift 2

Match List I with List II

LIST I	LIST II
A. Horizontal Analysis	I. Common size statement
B. Vertical Analysis	II. Comparative statement
C. External Analysis	III. Access to all published and unpublished information
D. Internal analysis	IV. Access only to published information

Choose the correct answer from the options given below:

2026: 21 May Shift 2

One of the limitations of financial analysis given below is:

2022: 8 Aug Shift 2

Comparative statements are the form of:

Which of the following is not a limitation of financial analysis?

Solution

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