Question

_______ is not a tool of ‘Analysis of Financial Statements’.

• A. Income Statement
• B. Ratio Analysis
• C. Comparative Statements
• D. Cash Flow Statement

Hint:

Tools of analysis include techniques and statements used to interpret financial results, not the reports themselves.

Answer 1

The Correct Option is B

Analysis of Financial Statements involves evaluating a firm’s financial data using tools like Comparative Statements, Common Size Statements, Cash Flow Statement, and Ratio Analysis. The Income Statement is a component of the financial statements, not a tool for analyzing them. Hence, it is not considered an analytical tool in itself.