Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Analysis of Financial Statement NCERT Solutions | State the importance of Financial Analys

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

What do you understand by analysis and interpretation of financial statements? Discuss its importance.

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

What is the importance of comparative statements? Illustrate youranswer with particular reference to comparative income statement.

Explain how common size statements are prepared giving an example.

What do you mean by Common Size Statements?

List the techniques of Financial Statement Analysis.

What are Comparative Financial Statements?

State the meaning of Analysis and Interpretation.

Distinguish between Vertical and Horizontal Analysis of financial data.

What do you mean by Ratio Analysis?

State the meaning of financial statement analysis?

What does a Bearer Debenture mean?

What are various types of ratios?

What are limitations of financial statement analysis?

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

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

List any three objectives of analysing financial statements?

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

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

Describe the steps for creating Sinking Fund for redemption of debentures.

Explain the process of preparing income statement and balance sheet.

State the meaning of financial statement analysis?

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

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

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

List any three objectives of analysing financial statements?

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.