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


Team Careers360 15th Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

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.

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