State the meaning of Analysis and Interp | Class 12 Accountancy - Company Accounts and Analysis of Financial Statements Chapter Analysis of Financial Statement, Analysis of Financial Statement NCERT Solutions

Describe the different techniques of financial analysis and explain the limitations of financial analysis.

Explain the usefulness of trend percentages in interpretation of financial performance of a company.

What do you mean by Common Size Statements?

What do you understand by analysis and interpretation of financial statements? Discuss its importance.

Distinguish between Vertical and Horizontal Analysis of financial data.

What are Comparative Financial Statements?

Explain how common size statements are prepared giving an example.

State the importance of Financial Analysis?

List the techniques of Financial Statement Analysis.

What is the importance of comparative statements? Illustrate youranswer with particular reference to comparative income statement.

How will you disclose the following items in the Balance Sheet of a company;
(i) Loose tools
(ii) Uncalled liability on partly paid-up shares
(iii) Debentures redemption reserve
(iv) Mastheads and publishing titles                                                                        (v) 10% debentures
(vi) Proposed dividend
(vii) Share forfeited account
(viii) Capital redemtion reserve
(ix) Mining rights
(x) Work-in-progress

The current ratio provides a better measure of overall liquidity only when a
firm’s inventory cannot easily be converted into cash. If inventory is liquid, the
quick ratio is a preferred measure of overall liquidity. Explain.

The liquidity of a business firm is measured by its ability to satisfy itslong-
term obligations as they become due. What are the ratios used forthis purpose?

What relationships will be established to study?
(a) Inventory Turnover (b) Debtor Turnover
(c) Payables Turnover (d) Working Capital Turnover

What are liquidity ratios? Discuss the importance of current and liquid ratio.

State the importance of financial statements to
(i) shareholders
(ii) creditors
(iii) government
(iv) investors

What do you mean by Ratio Analysis?

Prepare the format of balance sheet and explain the various elements of balance sheet.

What are various types of ratios?

How would you study the Solvency position of the firm?

How would you deal with ‘Premium on Redemption of Debentures?

How will you disclose the following items in the Balance Sheet of a company;
(i) Loose tools
(ii) Uncalled liability on partly paid-up shares
(iii) Debentures redemption reserve
(iv) Mastheads and publishing titles                                                                        (v) 10% debentures
(vi) Proposed dividend
(vii) Share forfeited account
(viii) Capital redemtion reserve
(ix) Mining rights
(x) Work-in-progress

What is meant by ‘Premium on Redemption of Debentures’?

Can the company purchase its own debentures?

What does a Bearer Debenture mean?

The average age of inventory is viewed as the average length of time inventory is held by the firm or as the average number of days’ sales in inventory. Why?

What is a ‘Convertible Debenture’?

What is meant by redemption of debentures by ‘Purchase in the Open Market’?

Explain the different types of debentures?

What is meant by ‘Mortgaged Debentures’?