Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Analysis of Financial Statement NCERT Solutions | Explain the usefulness of trend percenta

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?

State the importance of Financial Analysis?

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’?

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.

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.

List any three objectives of analysing financial statements?

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

What are various types of ratios?

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?

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?