DK Goel Solutions for Class 12 Accountancy Vol 2 Chapter 2 Financial Statements Analysis

DK Goel Accountancy Class 12 Solutions Chapter 2 Financial Statements Analysis which is outlined by expert Accountancy teachers from the latest version of DK Goel Accountancy Class 12 textbook solutions. We at BYJU’S provide DK Goel Solutions to assist students to comprehend all the theories in particular. Click here to learn more concepts in Accountancy, however, the concepts of Admission of a partner, Accounting Ratios and Cash Flow Statement (As per AS – 3 Revised) is required.

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.

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