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Need for Analysis of Financial Information

In common siz...

Question

In common size Balance Sheet , total of assets and liabilities is assumed to be equal to ________.

A

Inter‐firm comparison

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B

Ratio Analysis

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C

Intra‐firm comparison

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D

Inter‐industry comparison

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Solution

The correct option is C
Intra‐firm comparison

In common size Balance Sheet , total of assets and liabilities is assumed to be equal to 100

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Similar questions

Q. Inter-firm comparison becomes difficult with the help of financial analysis.

Q. Objective Type Questions :
State whether following statements are true or false :

Ratio Analysis is useful for inter-firm comparison.

Prepare a Common Size balance sheet from the following balance sheet of Aditya Ltd. and Anjali Ltd.:

Particulars	Aditya Ltd. Rs.	Anjali Ltd. Rs.
I. Equity and Liabilities
a) Equity share capital	6,00,000	8,00,000
b) Reserves and surplus	3,00,000	2,50,000
c) Current liabilities	1,00,000	1,50,000
Total	10,00,000	12,00,000
II. Assets
a) Fixed assets	4,00,000	7,00,000
b) Current assets	6,00,000	5,00,000
Total	1,00,0000*	12,00,000

*The total of Liabilities side must be equal to the total of Assets side, therefore, it should be 10,00,000.

Q. Comparative statement when prepared for comparing the enterprise's financial statements with that of another enterprise, is known as Inter-firm comparison.

Q. Total assets of a firm is Rs. 1,50,000, Capital amounted to Rs.70,000, total outside liabilities would be _________.

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