Question:
The tool of ‘Analysis of Financial Statements’ which helps to assess the profitability, solvency, and efficiency of an enterprise is known as:
The tool of ‘Analysis of Financial Statements’ which helps to assess the profitability, solvency, and efficiency of an enterprise is known as:
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Use ratio analysis to compare financial performance over time or with industry standards.
Updated On: Jan 28, 2025
- Cash flow statement
- Comparative statement
- Common size statement
- Ratio analysis
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The Correct Option is D
Solution and Explanation
Ratio analysis is a financial analysis tool used to assess an enterprise’s profitability, solvency, liquidity, and operational efficiency. It involves calculating ratios such as current ratio, debt-equity ratio, and return on capital employed.
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\vspace{0.2cm} \begin{tabular}{|l|r|r|} \hline Particulars & Dr. Amount (Rs) & Cr. Amount (Rs)
\hline Bank A/c \hspace{5cm} Dr. & 4,75,000 &
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