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.

Explain how common size statements are prepared giving an example.

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

State the meaning of Analysis and Interpretation.

List the techniques of Financial Statement Analysis.

What are Comparative Financial Statements?

What do you mean by Common Size Statements?

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’?

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.

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

Can the company purchase its own debentures?

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

Name the head under which ‘discount on issue of debentures’ appears in the balance sheet of a company.

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

What is discount on issue of debentures?

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

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?

Explain the different types of debentures?