Question 1

List the techniques of Financial Statement Analysis.

Answer

(a)Trend analysis
(b)Common-size financial analysis
(c)Financial ratio analysis
(d)Cost volume profit analysis
(e)Benchmarking (industry) analysis

Popular Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements

Q:-
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
Q:-
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.
Q:-
Explain the usefulness of trend percentages in interpretation of financial performance of a company.
Q:-
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?
Q:-
What relationships will be established to study?
(a) Inventory Turnover (b) Debtor Turnover
(c) Payables Turnover (d) Working Capital Turnover
Q:-
What do you understand by analysis and interpretation of financial statements? Discuss its importance.
Q:-
State the importance of financial statements to
(i) shareholders
(ii) creditors
(iii) government
(iv) investors
Q:-
What are liquidity ratios? Discuss the importance of current and liquid ratio.
Q:-
What is the importance of comparative statements? Illustrate youranswer with particular reference to comparative income statement.
Q:-
What do you mean by Ratio Analysis?

Recently Viewed Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements

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