Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Analysis of Financial Statement NCERT Solutions | State the importance of Financial Analys
State the importance of Financial Analysis?
Financial Analysis has great importance to various accounting users on
various matters:
1. It helps in evaluating the profit earning capacity and financial feasibility of a business.
2. It helps in assessing the long-term solvency of the business.
53. Many business owners and company managers have found that insight gained from their examination of company financial statements can be invaluable. Such insight can help businesses improve their profitability, cash flow, and value.
More Questions From Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Analysis of Financial Statement
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Explain the usefulness of trend percentages in interpretation of financial performance of a company.
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What do you understand by analysis and interpretation of financial statements? Discuss its importance.
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Describe the different techniques of financial analysis and explain the limitations of financial analysis.
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What is the importance of comparative statements? Illustrate youranswer with particular reference to comparative income statement.
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Explain how common size statements are prepared giving an example.
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What do you mean by Common Size Statements?
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State the meaning of Analysis and Interpretation.
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What are Comparative Financial Statements?
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List the techniques of Financial Statement Analysis.
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Distinguish between Vertical and Horizontal Analysis of financial data.
Popular Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
- Q:- What is meant by a Debenture?
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What do you mean by Ratio Analysis?
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State the meaning of financial statement analysis?
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What does a Bearer Debenture mean?
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What are various types of ratios?
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What are limitations of financial statement analysis?
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State the meaning of ‘Debentures issued as a collateral security’.
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What relationships will be established to study?
(a) Inventory Turnover (b) Debtor Turnover
(c) Payables Turnover (d) Working Capital Turnover - Q:-
List any three objectives of analysing financial statements?
- Q:-
What is meant by ‘Issue of debentures for consideration other than cash’?
Recently Viewed Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
- Q:-
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? - Q:-
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. - Q:-
What are liquidity ratios? Discuss the importance of current and liquid ratio.
- Q:- What is meant by a Debenture?
- Q:-
Explain the nature of the financial statements.
- Q:-
State the importance of financial statements to
(i) shareholders
(ii) creditors
(iii) government
(iv) investors - Q:-
How will you disclose the following items in the Balance Sheet of a company;
(i) Loose tools
(ii) Uncalled liability on partly paid-up shares
(iii) Debentures redemption reserve
(iv) Mastheads and publishing titles (v) 10% debentures
(vi) Proposed dividend
(vii) Share forfeited account
(viii) Capital redemtion reserve
(ix) Mining rights
(x) Work-in-progress - Q:-
What is ‘Capital Reserve’?
- Q:-
Explain in detail about the significance of the financial statements.
- Q:-
What do you mean by Ratio Analysis?
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