Question:
Which of the following is not an objective of ‘Analysis of Financial Statements’?
Which of the following is not an objective of ‘Analysis of Financial Statements’?
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Updated On: Jan 27, 2025
- To assess the current profitability and operational efficiency of the firm.
- To ascertain the relative importance of different components of the financial position of the firm.
- To consider the impact of price level changes.
- To identify the reasons for change in the profitability/financial position of the firm.
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The Correct Option is C
Solution and Explanation
The analysis of financial statements focuses on evaluating the profitability, operational efficiency, and financial health of the firm. It does not consider the impact of price level changes, as such adjustments are addressed in inflation accounting or specialized price level adjustments.
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