Financial Statements

Analysis

Easy

Financial Statements

One of the limitations of financial analysis given below is:

It is only a study of reports from the company.

It assess the current profitability and operational efficiency of the firm as a whole as well as its different departments, to judge the financial health of the firm.

It ascertain the relative importance of different components of the financial position of the firm.

It identify the reasons for change in the profitability/financial position of the firm.

✅ Correct Option: 1

Options 2, 3 and 4 describe the objectives or uses of financial analysis. Being confined to a study of the company's own reports, which ignores qualitative and external factors, is a stated limitation.

2025: 24 May Shift 1

Which among the following are the commonly used tools for financial analysis?

(A) Horizontal analysis

(B) Vertical analysis

(D) Trend analysis

Choose the correct answer from the options given below:

2022: 20 Aug Shift 2

In common size statement, if revenue from operations are Rs. 23,00,000 and other incomes are Rs. 3,00,000, then the percentage of 'Total Revenue from Operations' to 'Revenue from operations' will be:

2025: 24 May Shift 1

Arrange the following outcomes in the correct order for calculating profit and loss in the common-size statement

(A) Net Profit

(B) Non-Operating Income

(D) Profit after tax

Choose the correct answer from the options given below:

2026: 24 May Shift 1

Match List-I with List-II

List-I	List-II
(A) These are the statements showing the profitability and financial position of a firm for different periods of time in a comparative form to give an idea about the position of two or more periods.	(I) Common Size Statements
(B) It summarises the causes for the changes in cash position of a business enterprise between dates of two balance sheets.	(II) Comparative Statements
(C) These are the statements which indicate the relationship of different items of a financial statement with a common item by expressing each item as a percentage of that common item.	(III) Ratio Analysis
(D) It describes the significant relationship which exists between various items of a balance sheet and a statement of profit and loss of a firm.	(IV) Cash Flow Analysis

Choose the correct answer from the options given below:

2025: 26 May Shift 2

Which of the following is not a constituents of the credit policy of a business firm?

2026: 12 May Shift 1

Comparative statements in financial analysis are also known as:

One of the limitations of financial analysis given below is:

Solution

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