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
- Q:-
Explain the usefulness of trend percentages in interpretation of financial performance of a company.
- Q:-
What do you understand by analysis and interpretation of financial statements? Discuss its importance.
- Q:-
Describe the different techniques of financial analysis and explain the limitations of financial analysis.
- Q:-
Explain how common size statements are prepared giving an example.
- Q:-
What do you mean by Common Size Statements?
- Q:-
State the importance of Financial Analysis?
- Q:-
List the techniques of Financial Statement Analysis.
- Q:-
What are Comparative Financial Statements?
- Q:-
State the meaning of Analysis and Interpretation.
- Q:-
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?
- Q:-
What do you mean by Ratio Analysis?
- Q:-
State the meaning of financial statement analysis?
- Q:-
What does a Bearer Debenture mean?
- Q:-
What are various types of ratios?
- Q:-
What are limitations of financial statement analysis?
- Q:-
State the meaning of ‘Debentures issued as a collateral security’.
- Q:-
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:-
Name the head under which ‘discount on issue of debentures’ appears in the balance sheet of a company.
- Q:-
How would you study the Solvency position of the firm?
- Q:-
State the importance of financial statements to
(i) shareholders
(ii) creditors
(iii) government
(iv) investors - Q:-
What does a Bearer Debenture mean?
- Q:-
How would you deal with ‘Premium on Redemption of Debentures?
- Q:-
What are liquidity ratios? Discuss the importance of current and liquid ratio.
- 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:-
Explain how financial statements are useful to the various parties who are interested in the affairs of an undertaking?
- Q:- What is meant by a Debenture?
- Q:-
Prepare the format of statement of profit and loss and explain its items.
- All Chapters Of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
- All Subjects Of Class 12