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Comparative Statement of Profit and Loss

Inter-firm co...

Question

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

A

True

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B

False

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Solution

The correct option is B False
False. Inter-firm comparison will become easier with help of financial analysis as it analyses and interprets the financial information in a simplified manner. Inter firm comparison is comparison between 2 different enterprises.

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

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

Ratio Analysis is useful for inter-firm comparison.

Q. Which of the following statements are true about Ratio analysis?
a. Ratio analysis is useful in financial analysis.
b. Ratio analysis is helpful in communication and coordination.
c. Ratio analysis is not helpful in identifying weak spots of the business.
d. Ratio analysis is helpful in financial planning and forecasting.

Q. Financial analysis helps the users of the financial statements to understand the complicated matter in a simplified manner.

Q. Financial Analysis does not help the users of the financial statements to understand the complicated matters in simplified manner.

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