1
The 3 Ps, i.e. the three objectives of analysis and interpretation of financial statements are : Progress, Position and Prospects.
Answer: True
Answer: True
A) When all the figures in a balance sheet are stated as percentage of the total, it is termed as horizontal analysis.
B) When financial statements of several years are analyzed, it is termed as vertical analysis.
C) Vertical Analysis is also termed as dynamic analysis.
Answer: Both A and C
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A) When ratios of previous years are compared with current years, they are called trend ratios.
B) Trend percentages and trend ratios are used in static analysis.
C) Reliability of financial analysis depends upon the reliability of financial data.
Answer: A, B, C
Answer: All of the above
A) Common-size balance sheet shows relative value of the various items.
B) In the common size income statement, each product is represented as a percentage of the net sales figure.
C) Common size income statements represent the various elements as a percentage of the gross profit.
Answer: Both A and B
A) External analysis depends entirely on issued financial statements.
B) Interpretation and analysis both are different.
C) Financial analysis covers interpretation.
Answer: A, B, C
Answer: All of the above
Answer: Profit & Loss Statement and Balance sheet
