Question

The most commonly used tools for financial analysis are :

(A) Comparative Statements

(B) Common Size Statements

(C) Accounting Ratios

(D) All of the above​

Answer 1

Answer:

Commonly used tools of financial analysis are: Comparative statements, Common size statements, trend analysis, ratio analysis, funds flow analysis, and cash flow analysis.

Answer 2

The most commonly used tools for financial analysis are all of the above. (Option D)

• The concept of analysis is concerned with analysing the various important statements to take major financing decisions.
• This is based on the information obtained from the accounting ratios, statements, and common size statements of a company.
• These help in determining the profitability, leverage, liquidity, trends, other related information necessary for the company's growth.
• The current positioning is identified with an aim to forecast future actions.