Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Accounting Ratios NCERT Solutions | What are liquidity ratios? Discuss the i

The current ratio provides a better measure of overall liquidity only when a
firm’s inventory cannot easily be converted into cash. If inventory is liquid, the
quick ratio is a preferred measure of overall liquidity. Explain.

The liquidity of a business firm is measured by its ability to satisfy itslong-
term obligations as they become due. What are the ratios used forthis purpose?

What relationships will be established to study?
(a) Inventory Turnover (b) Debtor Turnover
(c) Payables Turnover (d) Working Capital Turnover

What are various types of ratios?

What do you mean by Ratio Analysis?

The average age of inventory is viewed as the average length of time inventory is held by the firm or as the average number of days’ sales in inventory. Why?

How would you study the Solvency position of the firm?

What are important profitability ratios? How are these worked out?

List the techniques of Financial Statement Analysis.

State the meaning of financial statement analysis?

What does a Bearer Debenture mean?

Distinguish between Vertical and Horizontal Analysis of financial data.

What are limitations of financial statement analysis?

State the meaning of ‘Debentures issued as a collateral security’.

State the meaning of Analysis and Interpretation.

List any three objectives of analysing financial statements?

What is meant by ‘Issue of debentures for consideration other than cash’?

Explain the usefulness of trend percentages in interpretation of financial performance of a company.

Explain how financial statements are useful to the various parties who are interested in the affairs of an undertaking?

Prepare the format of statement of profit and loss and explain its items.

Describe the different techniques of financial analysis and explain the limitations of financial analysis.

List any three objectives of analysing financial statements?

Differentiate between redemption of debentures out of capital and out of profits.

List the techniques of Financial Statement Analysis.

Name the head under which ‘discount on issue of debentures’ appears in the balance sheet of a company.

Describe the meaning of ‘Debenture Issued as Collateral Securities’. What accounting treatment is given to the issue of debentures in the books of accounts?