Question

Which analysis is a judgemental process which aims to estimate current and past financial positions and the results of the operation of an enterprise, with primary objective of determining the best possible estimates and predictions about the future conditions?

• A. Cash flow Analysis
• B. Trend Analysis
• C. Ratio Analysis
• D. Financial Statement Analysis

Hint:

Trend analysis and ratio analysis are parts of financial statement analysis. The broader term for judgment and prediction is financial statement analysis.

Answer 1

The Correct Option is D

Step 1: Understanding the question.
The focus here is on analyzing both current and past financial positions, judging performance, and predicting future financial conditions.

Step 2: Elimination of options.
- Cash Flow Analysis → Limited to cash inflows/outflows only.
- Trend Analysis → Focuses only on pattern over time, not full judgment.
- Ratio Analysis → Focuses only on key ratios.
- Financial Statement Analysis → Broad judgmental process covering past, present, and predictions.

Step 3: Conclusion.
Thus, the correct answer is Financial Statement Analysis.

Final Answer: \[ \boxed{\text{Financial Statement Analysis}} \]