Question

Which of the following is not the method of financial statement analysis?

• A. Ratio Analysis
• B. Comparative Analysis
• C. Trend Analysis
• D. Capitalisation Method

Hint:

Don’t confuse goodwill valuation methods (like Capitalisation, Super Profit) with tools of financial statement analysis.

Answer 1

The Correct Option is D

Step 1: Standard methods of financial analysis.
The major tools used are: - Ratio Analysis (liquidity, profitability, solvency ratios)
- Comparative Analysis (comparison over years)
- Trend Analysis (study of changes with base year)
- Common-size statements
Step 2: Capitalisation method.
Capitalisation method is not a tool for analysing financial statements. Instead, it is used for valuation of goodwill in partnership accounts.
Step 3: Conclude.
Hence, Capitalisation Method is not a method of financial statement analysis.
Final Answer: \[ \boxed{\text{Capitalisation Method}} \]