Analysis of Financial Statements

Commerce ⇒ Accountancy

Analysis of Financial Statements starts at 12 and continues till grade 12. QuestionsToday has an evolving set of questions to continuously challenge students so that their knowledge grows in Analysis of Financial Statements. How you perform is determined by your score and the time you take. When you play a quiz, your answers are evaluated in concept instead of actual words and definitions used.

See sample questions for grade 12

Explain the difference between internal and external analysis of financial statements.

Explain the difference between vertical and horizontal analysis of financial statements.

Explain the importance of inter-firm comparison in financial statement analysis.

Explain the significance of ratio analysis in financial statement analysis.

Given the following data for three years: Net Profit (₹) - Year 1: 1,00,000; Year 2: 1,20,000; Year 3: 1,50,000. Calculate the trend percentage for Year 3, taking Year 1 as the base year.

Given the following data for two years: Net Sales in Year 1 = ₹5,00,000, Net Sales in Year 2 = ₹6,00,000. Calculate the percentage increase in Net Sales.

Given the following data: Current Assets = ₹2,00,000, Current Liabilities = ₹1,00,000. Calculate the Current Ratio.

Given the following data: Net Sales = ₹8,00,000, Cost of Goods Sold = ₹6,00,000. Calculate the Gross Profit Ratio.

Which of the following is a horizontal analysis tool? (1) Common Size Statement, (2) Comparative Statement, (3) Ratio Analysis, (4) Cash Flow Statement

Which of the following is a limitation of ratio analysis? (1) It ignores price level changes, (2) It helps in inter-firm comparison, (3) It is based on quantitative data, (4) It is easy to calculate

Which of the following is a qualitative factor that may affect financial statement analysis? (1) Market reputation, (2) Current Ratio, (3) Net Profit, (4) Gross Sales

Which of the following is a tool of financial statement analysis? (1) Ratio Analysis, (2) Cash Flow Statement, (3) Ledger Posting, (4) Journal Entry

Fill in the blank: The analysis of financial statements is based on the data provided in the __________ and the Statement of Profit and Loss.

Fill in the blank: The analysis of financial statements is useful to __________ for making investment decisions.

Fill in the blank: The formula for Debt-Equity Ratio is __________ divided by Equity.

Fill in the blank: The main objective of financial statement analysis is to assess the __________ and profitability of a business.

State whether the following statement is True or False: Common size statements help in comparing the performance of companies of different sizes.

State whether the following statement is True or False: Financial statement analysis can help in identifying the trends in financial performance over a period of time.

State whether the following statement is True or False: Financial statement analysis ignores the effect of inflation.

True or False: Comparative statements are used to compare the financial data of two or more periods.