Question

Which of the following is not a limitation of ‘Financial Statements Analysis’?

• A. It is affected by personal bias.
• B. Intra-firm comparison.
• C. Lack of qualitative analysis.
• D. Ignores price level changes

Answer 1

The correct option is B

Intra-firm comparison.

Answer: B. Intra-firm comparison.

Financial statement analysis has some limitations like it is based on historical cost, ignores price level changes, is affected by personal bias, lacks precision and use of qualitative analysis.

Also read:

• Uses and Importance of Financial Statements
• Tools of Analysis of Financial Statements

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