Question : Which of the following best describes the intent or goal of financial analysis?
Option 1: To assess the short-term and long-term liquidity position of the firm
Option 2: To assess the current profitability of the firm
Option 3: To measure the solvency of the firm
Option 4: All the above
Correct Answer: All the above
Solution : A financial analysis's main objective is to determine whether a given organisation is secure, solvent, liquid, or profitable enough to justify a financial investment. It is employed to assess financial trends, establish monetary policy, create long-term corporate activity plans, and choose investments in projects or businesses.
Hence the correct answer is option 4.
