DK Goel Accountancy Class 12 Solutions Vol 2 Chapter 2 Financial Statements Analysis from the new edition of DK Goel Accountancy Class 12 textbook solutions, which is explained by expert Accountancy instructors. MNS EdTech offers DK Goel Solutions to help students understand all of the theories in particular. Learn more accounting concepts, but particularly the concepts of admission of a partner, Accounting partner, Accounting Ratios and Cash Flow Statement is important.
DK Goel Solutions Class 12 – Chapter 2 – Part B
Question 1
What is the meaning of Financial Analysis?
Answer:
Financial statements give a mass of complex information in the absolute monetary terms and reveal a bit about the solvency, liquidity and profitability of the enterprise. The data that is provided is classified into groups and a comparison of various groups is made with one another.
Question 2
Mention 5 objectives of financial analysis.
Answer:
5 objectives of financial analysis are mentioned below:
- To measure the earning capacity or profitability
- To measure the solvency
- To identify the trend of the business
- To furnish useful data to the management
- To measure the financial strength
Question 3
Mention 5 importance of financial analysis.
Answer:
5 importance of financial analysis are mentioned below:
- Significance for creditors
- Significance for government
- Significance for employees
- Significance for investors
- Significance for researchers
Question 4
Mention any 2 uses of analysing the financial statements.
Answer:
2 uses of analysing the financial statements are mentioned below:
- Helpful in making investment decisions
- Helpful in making credit decisions
Question 5
Explain how financial statement analysis ignores qualitative elements.
Answer:
The qualitative elements like – the quality of labour force, public relations, quality of management etc., ignored while carrying out the analysis of financial statements.
Related Links
| DK Goel Accountancy Solutions Class 12 – Part B (Chapter wise) | |
| Chapter 2 Financial Statements Analysis | Chapter 3 Tools for Financial Analysis: Comparative Statements |
| Chapter 4 Common Size Statements | Chapter 5 Accounting Ratios |
| Chapter 6 Cash Flow Statement (As per AS – 3 Revised) | Chapter 1 Financial Statements of Companies |
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