Question : Which of the following statement is correct with respect of Analysis of Financial Statements?
Option 1: Analysis of Financial Statements is a systematic process of analyzing the financial Information in the financial statements to understand and take economic decisions.
Option 2: Analysis of Financial Statements is a study of relationships among various financial values as set out in the financial statements, i.e., Balance Sheet, Statement of Profit and Loss and Cash Flow Statement.
Option 3: Financial Statement Analysis is largely a study of relationships among the various financial factors in a business,
Option 4: All of the above
Correct Answer: All of the above
Solution : Answer = All of the above
Financial statement analysis involves systematically examining financial information in statements like the balance sheet and profit and loss statement to make informed economic decisions. It focuses on understanding relationships between different financial elements to gauge the financial health and performance of a business.
Hence, the correct option is 4.
