Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Analysis of Financial Statement NCERT Solutions | Distinguish between Vertical and Horizon

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

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

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

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

Explain how common size statements are prepared giving an example.

What do you mean by Common Size Statements?

What are Comparative Financial Statements?

State the meaning of Analysis and Interpretation.

List the techniques of Financial Statement Analysis.

State the importance of Financial Analysis?

What do you mean by Ratio Analysis?

State the meaning of financial statement analysis?

What does a Bearer Debenture mean?

What are various types of ratios?

What are limitations of financial statement analysis?

State the meaning of ‘Debentures issued as a collateral security’.

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

List any three objectives of analysing financial statements?

What is meant by ‘Issue of debentures for consideration other than cash’?

Explain the different types of debentures?

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

What is meant by ‘Issue of debenture at discount and redeemable at premium?

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

State the meaning of ‘Debentures issued as a collateral security’.

Explain how financial statements are useful to the various parties who are interested in the affairs of an undertaking?

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?

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 are important profitability ratios? How are these worked out?

Can a company purchase its own debentures in the open market? Explain.