BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Financial Statements Have No Predictive Value The information in a set of financial statements provides information about either historical results or the financial status of a business as of a specific date. The statements do not necessarily provide any value in predicting what will happen in the future.

Detailed explanation-2: -Financial statement limitations comprise concerns related to fraudulent practice while recording information, dependency on historical costs, lack of comparability, and non-adjustability to inflation that the analysts cannot overlook.

Detailed explanation-3: -Some other limitations of financial analysis are mentioned below : The financial analysis does not contemplate cost price level changes. The financial analysis might be ambiguous without the prior knowledge of the changes in accounting procedure followed by an enterprise.

Detailed explanation-4: -The main four limitations of financial accounting are use of estimates and cost basis, accounting methods and unusual data, lacking data, and diversification. Companies have to use estimates when exact values cannot be obtained.