Question:
The tool of analysis of financial statements which indicates the trend and direction of financial position and operating results is _______.
The tool of analysis of financial statements which indicates the trend and direction of financial position and operating results is _______.
Show Hint
Comparative statements show trends over time and are vital for inter-period analysis. Turnover ratios help assess how well a business converts its assets into sales.
Updated On: Jul 4, 2025
- Comparative Statements
- Common Size Statements
- Cash Flow Analysis
- Ratio Analysis
Hide Solution
Verified By Collegedunia
The Correct Option is A
Solution and Explanation
The correct answer is (A) Comparative Statements.
Explanation: Comparative statements present financial data of two or more periods side by side to show trends and changes over time. This helps analysts and management to identify how the financial position and performance of a business is moving—whether upwards, stable or downwards. It is particularly useful for spotting trends in revenues, expenses, profits, and key balances such as assets and liabilities.
Explanation: Comparative statements present financial data of two or more periods side by side to show trends and changes over time. This helps analysts and management to identify how the financial position and performance of a business is moving—whether upwards, stable or downwards. It is particularly useful for spotting trends in revenues, expenses, profits, and key balances such as assets and liabilities.
Was this answer helpful?
0
0
Top Questions on Financial Statement Analysis
- From the following information obtained from the books of KVK Ltd., calculate Net Assets Turnover Ratio and Debt Equity Ratio:
Information Table
Information Amount (₹) Preference Share Capital 8,00,000 Equity Share Capital 12,00,000 General Reserve 2,00,000 Balance in Statement of Profit and Loss 6,00,000 15% Debentures 4,00,000 12% Loan 4,00,000 Revenue from Operations 72,00,000 - CBSE CLASS XII - 2025
- Accountancy
- Financial Statement Analysis
- From the following Balance Sheet of Nayak Ltd., prepare a Comparative Balance Sheet as at 31stMarch, 2024.
- CBSE CLASS XII - 2025
- Accountancy
- Financial Statement Analysis
- Operating ratio of a company is 63%. Its gross profit ratio is 20%. What will be its operating profit ratio?
- CBSE CLASS XII - 2025
- Accountancy
- Financial Statement Analysis
- Which of the following is not a purpose of analysis of financial statements?
- CBSE CLASS XII - 2025
- Accountancy
- Financial Statement Analysis
- Ratios that are calculated for measuring the efficiency of operations of business based on effective utilisation of resources are called :
- CBSE CLASS XII - 2025
- Accountancy
- Financial Statement Analysis
View More Questions
Questions Asked in CBSE CLASS XII exam
- In case of association, abnormal molar mass of solute will:
- CBSE CLASS XII - 2025
- Solutions
- A student tries to tie ropes, parallel to each other from one end of the wall to the other. If one rope is along the vector $3\hat{i} + 15\hat{j} + 6\hat{k}$ and the other is along the vector $2\hat{i} + 10\hat{j} + \lambda \hat{k}$, then the value of $\lambda$ is:
- If \( \int \frac{1}{2x^2} \, dx = k \cdot 2x + C \), then \( k \) is equal to:
- CBSE CLASS XII - 2025
- Integration
- Find the angle at which the given lines are inclined to each other: \[ l_1: \frac{x - 5}{2} = \frac{y + 3}{1} = \frac{z - 1}{-3} \] \[ l_2: \frac{x}{3} = \frac{y - 1}{2} = \frac{z + 5}{-1} \]
- If \( \overrightarrow{a} + \overrightarrow{b} + \overrightarrow{c} = 0 \), \( |\overrightarrow{a}| = \sqrt{37} \), \( |\overrightarrow{b}| = 3 \), and \( |\overrightarrow{c}| = 4 \), then the angle between \( \overrightarrow{b} \) and \( \overrightarrow{c} \) is:
View More Questions