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Question

The common size statements are useful, both, in intra-firm comparisons over different years and also in making inter-
firm comparisons for several years. This analysis is also known as

The correct answer is
'Vertical analysis'

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Important Questions from Financial Statement Analysis

  1. The information with respect to a company is:

    EBIT = Rs. 35 lakhs

    15% Term loan = Rs. 50 lakhs

    Working capital term loan from bank @ 20% = Rs. 30 lakhs

    10% Preference share capital = Rs. 10 lakhs

    Public deposits accepted @ 14% = Rs. 15 lakhs

    Which one among the following is the Interest Coverage Ratio for the company?

  2. Sale of long-term investment shows

  3. Which technique(s) can be used in connection with analysis and interpretation of financial statements?

    1. Funds Flow Statement

    2. Net Working Capital Analysis

    3. Cash Flow Statement

    4. Ratio Analysis

  4. ________ is historical in nature and reflects the past position of business organization.

  5. Which one of the following is a limitation of Financial Accounting?

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