Question:
Which of the following tools of ‘Analysis of Financial Statements’ indicate the trend and direction of financial position and operating results?
Which of the following tools of ‘Analysis of Financial Statements’ indicate the trend and direction of financial position and operating results?
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Comparative statements are used to identify financial trends over time, which is essential for decision-making. Always analyze both the percentage change and absolute change for a comprehensive understanding.
Updated On: Jan 25, 2025
- Comparative statements
- Common size statements
- Cash flow analysis
- Ratio analysis
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The Correct Option is A
Solution and Explanation
Comparative statements show the trend and direction of financial position and operating results by comparing financial information over multiple periods. This helps in analyzing the financial performance and identifying growth trends.
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