Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Analysis of Financial Statement NCERT Solutions | What is the importance of comparative st
What is the importance of comparative statements? Illustrate youranswer with particular reference to comparative income statement.
The following are the importance of Comparative Statements.
(i) Make Presentation Simpler : Comparative statements presents the financial
data in a simpler form. On the other hand, an year-wise data of the same items
are presented side-byside, which not only makes the presentation clear but also
enables easy comparisons (both intra-firm and inter-firm) conclusive.
(ii) Help in Drawing Conclusion: The presentation of comparative statement is so
effective that it helps the analyst to draw conclusion quickly and easily and that
too without any ambiguity.
(iii) Help in Forecasting :The management may analyse the trend and forecast
and draft various future plans and policy measures, with the help of comparative
statement:
(iv) Help in Detection of Problems :The comparative analysis not only enables the management in locating the problems but also helps them to put various
budgetary controls and corrective measures to check whether the current
performance is aligned with that of the ” planned targets. With the help of the
comparison of the financial data of two or more years, the financial management
can easily detect the problems.
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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Describe the different techniques of financial analysis and explain the limitations of financial analysis.
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Explain how common size statements are prepared giving an example.
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State the importance of Financial Analysis?
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State the meaning of Analysis and Interpretation.
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Popular Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
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State the meaning 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?
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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
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State the importance of financial statements to
(i) shareholders
(ii) creditors
(iii) government
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Prepare the format of balance sheet and explain the various elements of balance sheet.
- 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:-
Describe the steps for creating Sinking Fund for redemption of debentures.
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Explain the different terms for the issue of debentures with reference to their redemption.
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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:-
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?
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Name the head under which ‘discount on issue of debentures’ appears in the balance sheet of a company.
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The liquidity of a business firm is measured by its ability to satisfy itslong-
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